Author: admin

Whatever You Do, Don’t Short Stocks On These Three Days In December

Regular readers know that at the end of every month we look at the next month’s POMO schedule, and urgently advise against shorting stocks on POMO days. That in the New Normal POMO days are pretty much every single day, may have something to do with why the S&P is set for a +30% close in 2013. However, in December the Fed has something very special served up. In addition to the usual $45 billion in total monthly wealth effect injections (which happen to quietly end up directly in Singapore private wealth offshore accounts), in the next month, Ben Bernanke’s parting gift to the 0.1% will be not one… not two… but a whopping three days with double POMOs: December 3, December 9 and, drumroll, December 19, aka the day after the final 2-day FOMC meeting of 2013, when Kevin Henry and his peers will monetize up to a whopping $7.5 billion in one day!

Is it a harbinger that something bad may take place the day before? We doubt it: this is merely the Fed doing everything it can in its power to make sure Santa Claus appears right on schedule for the billionaires of the world just so their spending habits are not impaired.

We, however, are positive that anyone caught shorting stocks on pretty much any day in December, but especially those three, will certainly not feel the benefits of whatever wealth the middle class has left being funneled into the bank accounts of the uberwealthy, as Ben Bernanke’s reverse Robin Hood ramps on, alongside the Russell 2000.

Joking aside, something notable is that while the Fed is not monetizing anything between Christmas and New Year’s Day in 2013, it had no problems with injecting liquidity in the quiet week of 2012. One wonders what changed.

Source: Central Planning Politburo of New York


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ev5Eq0b3sFA/story01.htm Tyler Durden

Whatever You Do, Don't Short Stocks On These Three Days In December

Regular readers know that at the end of every month we look at the next month’s POMO schedule, and urgently advise against shorting stocks on POMO days. That in the New Normal POMO days are pretty much every single day, may have something to do with why the S&P is set for a +30% close in 2013. However, in December the Fed has something very special served up. In addition to the usual $45 billion in total monthly wealth effect injections (which happen to quietly end up directly in Singapore private wealth offshore accounts), in the next month, Ben Bernanke’s parting gift to the 0.1% will be not one… not two… but a whopping three days with double POMOs: December 3, December 9 and, drumroll, December 19, aka the day after the final 2-day FOMC meeting of 2013, when Kevin Henry and his peers will monetize up to a whopping $7.5 billion in one day!

Is it a harbinger that something bad may take place the day before? We doubt it: this is merely the Fed doing everything it can in its power to make sure Santa Claus appears right on schedule for the billionaires of the world just so their spending habits are not impaired.

We, however, are positive that anyone caught shorting stocks on pretty much any day in December, but especially those three, will certainly not feel the benefits of whatever wealth the middle class has left being funneled into the bank accounts of the uberwealthy, as Ben Bernanke’s reverse Robin Hood ramps on, alongside the Russell 2000.

Joking aside, something notable is that while the Fed is not monetizing anything between Christmas and New Year’s Day in 2013, it had no problems with injecting liquidity in the quiet week of 2012. One wonders what changed.

Source: Central Planning Politburo of New York


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ev5Eq0b3sFA/story01.htm Tyler Durden

Why Is Debt The Source Of Income Inequality And Serfdom? It's The Interest, Baby

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

"Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must)."

I often refer to debt serfdom, the servitude debt enforces on borrowers. The mechanism of this servitude is interest, and today I turn to two knowledgeable correspondents for explanations of the consequences of interest.

Correspondent D.L.J. explains how debt/interest is the underlying engine of rising income/wealth disparity:

Here is a table of the growth rate of the GDP.

If we use $16T as the approximate GDP and a growth rate of, say, 3.5%, the total of goods and services would increase one year to the next by about $500B.

Meanwhile, referencing the Grandfather national debt chart with the USDebtClock data, the annual interest bill is $3 trillion ($2.7 trillion year-to-date).

In other words, those receiving interest are getting 5-6 times more than the increase in gross economic activity.

Using your oft-referenced Pareto Principle, about 80% of the population are net payers of interest while the other 20% are net receivers of interest.

Also, keep in mind that one does not have to have an outstanding loan to be a net payer of interest. As I attempted to earlier convey, whenever one buys a product that any part of its production was involving the cost of interest, the final product price included that interest cost. The purchase of that product had the interest cost paid by the purchaser.

Again using the Pareto concept, of the 20% who receive net interest, it can be further divided 80/20 to imply that 4% receive most (64%?) of the interest. This very fact can explain why/how the system (as it stands) produces a widening between the haves and the so-called 'have nots'.

Longtime correspondent Harun I. explains that the serfdom imposed by debt and interest is not merely financial servitude–it is political serfdom as well:

As both of us have stated, you can create all of the money you want, however, production of real things cannot be accomplished with a keystroke.

Then there is the issue of liberty. Each Federal Reserve Note is a liability of the Fed and gives the bearer the right but not the obligation to purchase — whatever the Fed deems appropriate. How much one can purchase keeps changing base on a theory-driven experiment that has never worked. Since the Fed is nothing more than an agent of the Central State, the ability to control what the wages of its workers will purchase, is a dangerous power for any government.

If a Federal Reserve Note is a liability of the central bank, then what is the asset? The only possible answer is the nations productivity. So, in essence, an agent of the government, the central bank, most of which are privately owned (ownership is cloaked in secrecy) owns the entire productive output of free and democratic nation-states.

People who speak of liberty and democracy in such a system only delude themselves.

Then there is the solution, default. That only resolves the books, the liability of human needs remain. Bankruptcy does not resolve the residue of social misery and suffering left behind for the masses who became dependent on lofty promises (debt). These promises (debts) were based on theories that have reappeared throughout human history under different guises but have never worked.

More debt will not resolve debt. The individual’s liberty is nonexistent if he does not own his labor. A people should consider carefully the viability (arithmetical consequences) of borrowing, at interest, to consume their own production. The asset of our labor cannot simultaneously be a liability we owe to ourselves at interest.

Thank you, D.L.J. and Harun. What is the alternative to the present system of debt serfdom and rising inequality? Eliminate the Federal Reserve system and revert to the national currency (the dollar) being issued by the U.S. Treasury in sufficient quantity to facilitate the production and distribution of goods and services.

Is this possible? Not in our Financialized, Neofeudal-Neocolonial Rentier Economy; but as Harun noted in another email, Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must).

What we are discussing is what will replace the current system after it self-destructs.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/d8v1L2HaMlk/story01.htm Tyler Durden

Why Is Debt The Source Of Income Inequality And Serfdom? It’s The Interest, Baby

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

"Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must)."

I often refer to debt serfdom, the servitude debt enforces on borrowers. The mechanism of this servitude is interest, and today I turn to two knowledgeable correspondents for explanations of the consequences of interest.

Correspondent D.L.J. explains how debt/interest is the underlying engine of rising income/wealth disparity:

Here is a table of the growth rate of the GDP.

If we use $16T as the approximate GDP and a growth rate of, say, 3.5%, the total of goods and services would increase one year to the next by about $500B.

Meanwhile, referencing the Grandfather national debt chart with the USDebtClock data, the annual interest bill is $3 trillion ($2.7 trillion year-to-date).

In other words, those receiving interest are getting 5-6 times more than the increase in gross economic activity.

Using your oft-referenced Pareto Principle, about 80% of the population are net payers of interest while the other 20% are net receivers of interest.

Also, keep in mind that one does not have to have an outstanding loan to be a net payer of interest. As I attempted to earlier convey, whenever one buys a product that any part of its production was involving the cost of interest, the final product price included that interest cost. The purchase of that product had the interest cost paid by the purchaser.

Again using the Pareto concept, of the 20% who receive net interest, it can be further divided 80/20 to imply that 4% receive most (64%?) of the interest. This very fact can explain why/how the system (as it stands) produces a widening between the haves and the so-called 'have nots'.

Longtime correspondent Harun I. explains that the serfdom imposed by debt and interest is not merely financial servitude–it is political serfdom as well:

As both of us have stated, you can create all of the money you want, however, production of real things cannot be accomplished with a keystroke.

Then there is the issue of liberty. Each Federal Reserve Note is a liability of the Fed and gives the bearer the right but not the obligation to purchase — whatever the Fed deems appropriate. How much one can purchase keeps changing base on a theory-driven experiment that has never worked. Since the Fed is nothing more than an agent of the Central State, the ability to control what the wages of its workers will purchase, is a dangerous power for any government.

If a Federal Reserve Note is a liability of the central bank, then what is the asset? The only possible answer is the nations productivity. So, in essence, an agent of the government, the central bank, most of which are privately owned (ownership is cloaked in secrecy) owns the entire productive output of free and democratic nation-states.

People who speak of liberty and democracy in such a system only delude themselves.

Then there is the solution, default. That only resolves the books, the liability of human needs remain. Bankruptcy does not resolve the residue of social misery and suffering left behind for the masses who became dependent on lofty promises (debt). These promises (debts) were based on theories that have reappeared throughout human history under different guises but have never worked.

More debt will not resolve debt. The individual’s liberty is nonexistent if he does not own his labor. A people should consider carefully the viability (arithmetical consequences) of borrowing, at interest, to consume their own production. The asset of our labor cannot simultaneously be a liability we owe to ourselves at interest.

Thank you, D.L.J. and Harun. What is the alternative to the present system of debt serfdom and rising inequality? Eliminate the Federal Reserve system and revert to the national currency (the dollar) being issued by the U.S. Treasury in sufficient quantity to facilitate the production and distribution of goods and services.

Is this possible? Not in our Financialized, Neofeudal-Neocolonial Rentier Economy; but as Harun noted in another email, Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must).

What we are discussing is what will replace the current system after it self-destructs.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/d8v1L2HaMlk/story01.htm Tyler Durden

Libertarian Party Wars in D.C.: The "Take Who We Can Get" Folk vs, the Neo-Professionals

The Washington, D.C., Libertarian Party gets the kind of
detailed in-fighting reporting
in Washington City Paper that third parties (and
indeed even local and state branches of major parties) rarely get,
with news about how a Party with newfound ballot access in D.C.
sees conflict between those who are happy to get the Party rolling
with anyone and those said to be seeking a higher level of
professionalism.

Thanks to Bruce Majors winning the L.P. relatively trouble-free
ballot access by earning 6 percent in the 2012 election for D.C.’s
non-voting House member (Eleanor Holmes Norton kept the gig), the
L.P. needs to collect merely a couple of signatures to get
candidates on the ballot for local elections–literally just a
couple, representing one percent of the number of registered
Libertarians in D.C.

Now Majors is working hard to get other Libertarians to run for
local office:

So far, his candidate slate—all white men and [Sara] Panfil, a
white woman—doesn’t do much to disprove the stereotype of
Libertarians as a party for nerdy white people. Majors has had
trouble convincing people of color to take a trip to the Board of
Elections, even when, in an attempt just to get another candidate
on the ballot, he promises that their campaign work would be
limited to signing a few papers and appearing on the ballot.

In other words, Majors had to promise potential candidates they
would not win.

Still, Majors hopes to find a more diverse roster before his
party’s primary. “Not that I think of these people in that way, but
the media and the electorate will, so I have to also,” he says.

Conveniently for his plans, he’s setting the bar low. When out
trawling Libertarian gatherings for candidates, Majors says he’s
just looking for someone intelligent and presentable—and, of
course, willing to run for office.

But casting a wide net has its downsides, especially with a
party known for dislike of being told what to do. Before meeting
his candidates at the Board of Elections, Majors sent out a press
release declaring that [Frederick] Steiner would be running for
Council chairman; he decided to run for the at-large seat
instead.

Steiner’s on to something. Because of Home Rule Act
requirements, two of the Council’s four at-large seats have to go
to a candidate who’s not a member of the District’s majority
party—in other words, now and forever, the Democrats….

The significance of the set-aside seat isn’t lost
on John Vaught LaBeaume, another would-be
Libertarian candidate recruiter. While Majors will sign anyone with
a copy of The Road to Serfdom and a pulse,
LaBeaume is trying to recruit local business owners to run for the
at-large spot. If he succeeds, his candidate will be going up
against Majors’.

“Just me personally, I’m not going to work without a really
solid candidate,” LaBeaume says….

And like the old saying goes, find two Libertarians and you’ll
find at least two factions:

In a nod to their cantankerous party, Majors and LaBeaume give
each other a wide berth. Majors described LaBeaume to LL [Loose
Lips, the columnist writing this] as “my parallel person,” but
declined to give LL his rival’s name. (Fortunately, the paucity of
Libertarians in D.C. politics meant LL didn’t have to look
far.)

Majors contrasts his candidate-heavy approach with LaBeaume’s
criteria, which he describes as “anybody more famous than me.” He
says he has only occasional contact with LaBeaume—an impressive
feat, since, as Steiner jokes, you could accommodate the District’s
entire Libertarian Party membership at a very large dinner
party.

LaBeaume spoke in my
feature on the Sarvis campaign aftermath, and wrote
his own Reason piece on the L.P.’s future.

from Hit & Run http://reason.com/blog/2013/11/27/libertarian-party-wars-in-dc-the-take-wh
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Libertarian Party Wars in D.C.: The “Take Who We Can Get” Folk vs, the Neo-Professionals

The Washington, D.C., Libertarian Party gets the kind of
detailed in-fighting reporting
in Washington City Paper that third parties (and
indeed even local and state branches of major parties) rarely get,
with news about how a Party with newfound ballot access in D.C.
sees conflict between those who are happy to get the Party rolling
with anyone and those said to be seeking a higher level of
professionalism.

Thanks to Bruce Majors winning the L.P. relatively trouble-free
ballot access by earning 6 percent in the 2012 election for D.C.’s
non-voting House member (Eleanor Holmes Norton kept the gig), the
L.P. needs to collect merely a couple of signatures to get
candidates on the ballot for local elections–literally just a
couple, representing one percent of the number of registered
Libertarians in D.C.

Now Majors is working hard to get other Libertarians to run for
local office:

So far, his candidate slate—all white men and [Sara] Panfil, a
white woman—doesn’t do much to disprove the stereotype of
Libertarians as a party for nerdy white people. Majors has had
trouble convincing people of color to take a trip to the Board of
Elections, even when, in an attempt just to get another candidate
on the ballot, he promises that their campaign work would be
limited to signing a few papers and appearing on the ballot.

In other words, Majors had to promise potential candidates they
would not win.

Still, Majors hopes to find a more diverse roster before his
party’s primary. “Not that I think of these people in that way, but
the media and the electorate will, so I have to also,” he says.

Conveniently for his plans, he’s setting the bar low. When out
trawling Libertarian gatherings for candidates, Majors says he’s
just looking for someone intelligent and presentable—and, of
course, willing to run for office.

But casting a wide net has its downsides, especially with a
party known for dislike of being told what to do. Before meeting
his candidates at the Board of Elections, Majors sent out a press
release declaring that [Frederick] Steiner would be running for
Council chairman; he decided to run for the at-large seat
instead.

Steiner’s on to something. Because of Home Rule Act
requirements, two of the Council’s four at-large seats have to go
to a candidate who’s not a member of the District’s majority
party—in other words, now and forever, the Democrats….

The significance of the set-aside seat isn’t lost
on John Vaught LaBeaume, another would-be
Libertarian candidate recruiter. While Majors will sign anyone with
a copy of The Road to Serfdom and a pulse,
LaBeaume is trying to recruit local business owners to run for the
at-large spot. If he succeeds, his candidate will be going up
against Majors’.

“Just me personally, I’m not going to work without a really
solid candidate,” LaBeaume says….

And like the old saying goes, find two Libertarians and you’ll
find at least two factions:

In a nod to their cantankerous party, Majors and LaBeaume give
each other a wide berth. Majors described LaBeaume to LL [Loose
Lips, the columnist writing this] as “my parallel person,” but
declined to give LL his rival’s name. (Fortunately, the paucity of
Libertarians in D.C. politics meant LL didn’t have to look
far.)

Majors contrasts his candidate-heavy approach with LaBeaume’s
criteria, which he describes as “anybody more famous than me.” He
says he has only occasional contact with LaBeaume—an impressive
feat, since, as Steiner jokes, you could accommodate the District’s
entire Libertarian Party membership at a very large dinner
party.

LaBeaume spoke in my
feature on the Sarvis campaign aftermath, and wrote
his own Reason piece on the L.P.’s future.

from Hit & Run http://reason.com/blog/2013/11/27/libertarian-party-wars-in-dc-the-take-wh
via IFTTT

Online Obamacare Enrollment for Small Business Delayed. Again.

SHOPNot that it’s a huge frigging
surprise, but small business online enrollment in Affordable Care
Act-compliant health insurance, which was already
delayed from October 1 until December 1, will be pushed back a
full year, until November of 2014. Like a floundering big budget
movie production announcing just before the Fourth of July weekend
that a few scenes have to be reshot, so the resulting mess should
be hitting screens…eventually, the Obama administration rolled
out this particular turkey the day before Thanksgiving.

According to David Morgan at
Reuters:

The Obama administration on Wednesday announced a one-year delay
in online health insurance enrollment for small businesses with 50
or fewer full-time workers that could qualify for subsidized
coverage under Obamacare.

It was the latest in a series of delays that have diminished the
scope President Barack Obama’s landmark healthcare law, the Patient
Protection and Affordable Care Act. The administration has faced
implementation challenges before and since the troubled October 1
rollout of the federal website HealthCare.gov.

Robert Pear of the New York Times, perhaps growing a
bit justifiably cynical,
points out, “The announcement of the delay, just before
Thanksgiving, is reminiscent of the way the White House announced,
just before the Independence Day weekend, a one-year delay in the
requirement for larger employers to offer health insurance to
employees.”

Actually, if you go to the small business
section of Healthcare.gov, the site tantalizingly announces
that “The SHOP Marketplace is open for business!” Not so much. If
you click on “apply” you’re prompted to pick your state, before
being instructed, “You enroll in SHOP coverage directly through an
agent, broker, or insurance company.”

That’s helpful.

No matter how it’s done, expect a good bit of insurance shopping
to become necessary, since the Department of Health and Human
Services itself
estimated in 2010 that 49 to 80 percent of small employer
(under 100 workers) plans, which cover 43 million people, would
lose their grandfathered status. That would require the sort of

cancellation notifications that have raised so many eyebrows,
and blood pressures, in recent weeks among individuals. Unless the
president once more
unilaterally orders the temporary suspension of the
requirements of the law that he himself championed.

from Hit & Run http://reason.com/blog/2013/11/27/online-obamacare-enrollment-for-small-bu
via IFTTT

The NSA Is Tracking Your Porn Browsing

Ed Snowden's latest revelation may leave SEC officials quaking as the NSA "has been gathering records of online sexual activity and evidence of visits to pornographic websites as part of a proposed plan to harm the reputations of those whom the agency believes are radicalizing others through incendiary speeches." Of course, as we have seen, this 'information' would never be used by the government for non-radical-terrorist suppressing reasons, as the ACLU notes, is is "an unwelcome reminder of what it means to give an intelligence agency unfettered access to individuals' most sensitive information using tactics associated with the secret police services of authoritarian governments."

 

Via Snowden…

The National Security Agency has been gathering records of online sexual activity and evidence of visits to pornographic websites as part of a proposed plan to harm the reputations of those whom the agency believes are radicalizing others through incendiary speeches, according to a top-secret NSA document.

 

The document, provided by NSA whistleblower Edward Snowden, identifies six targets, all Muslims, as “exemplars” of how “personal vulnerabilities” can be learned through electronic surveillance, and then exploited to undermine a target’s credibility, reputation and authority.

 

The NSA document, dated Oct. 3, 2012, repeatedly refers to the power of charges of hypocrisy to undermine such a messenger.”

Full ACLU Statement:

The NSA considered discrediting six people by revealing surveillance evidence of their online sexual activity, visits to pornography websites, and other personal information, according to a report today in The Huffington Post. The article cited documents leaked by former NSA contactor Edward Snowden. The targets of the NSA’s plan were all Muslims whom the NSA characterized as “radicals” but who were not believed to be involved in terrorism. The documents say one of the targets was a “U.S. person,” a term describing American citizens and legal permanent residents, but all of the targets were reportedly outside the United States.

 

American Civil Liberties Union Deputy Legal Director Jameel Jaffer had this reaction:

 

“This report is an unwelcome reminder of what it means to give an intelligence agency unfettered access to individuals' most sensitive information. One ordinarily associates these kinds of tactics with the secret police services of authoritarian governments. That these tactics have been adopted by the world’s leading democracy – and the world’s most powerful intelligence agency – is truly chilling.”


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/coujRQSBm4E/story01.htm Tyler Durden

David Rosenberg Turns Bullish, Earns $3.1 Million

In early 2013, many were mystified when one of the most vocal deflationists, and hence stock market bears, David Rosenberg, turned furiously bullish. Just what was the motive behind this transformation many wondered? Thanks to a just filed Gluskin Sheff compensation table, we can put all such lingering questions to rest: the reason, or rather reasons: 3,082,441… all-cash.

Some more on why the formerly rather bearish ex-Merrill strategist will make the most in 2013, or $3.1 million, almost as much as the CEO of his employer, and has the highest, $1.8 million, annual incentive plan of any Gluskin Sheff:

Mr. Rosenberg’s employment agreement provides a mechanism by which Mr. Rosenberg shares in any net revenues generated from Gluskin Sheff’s efforts to monetize economic research authored by Mr. Rosenberg and published by Gluskin Sheff. Mr. Rosenberg’s employment agreement further provides that he will receive guaranteed additional compensation of $1,800,000 per annum in addition to his base salary until June 30, 2014…. In the case of Mr. Rosenberg, his employment agreement stipulates that he will receive guaranteed additional compensation of $1,800,000 per annum until June 30, 2014, in addition to his base salary. For the 2013 fiscal year, $0.5 million of the guaranteed additional compensation paid to Mr. Rosenberg was allocated from the Bonus Pool, and for fiscal 2012 the guaranteed additional compensation was not allocated from the bonus pool.

And the full explanation, from Globe and Mail

It’s hard to imagine a a top-five executive with a public company in Canada with a sweeter deal than David Rosenberg, as evidenced by his employer Gluskin + Sheff Associates Inc.’s newly filed management information circular.

 

Mr. Rosenberg, the all-star chief economist and strategist with the money management firm earned an impressive $3.1-million in the company’s most recent fiscal year, ended June 30, making the former chief North American economist at Bank of America-Merrill Lynch the company’s second-highest paid executive behind CEO Jeremy Freedman.

 

What is unusual about his compensation is how little of it is tied to the success of his employer, either in its financial performance or stock price. Actually, none of it is. As long as Gluskin has enough money to keep on the lights, stay in business and pay employees, Mr. Rosenberg is guaranteed a payment of $2-million a year. That’s split into two parts: his $200,000 salary, and a $1.8-million amount identified in the proxy circular as “guaranteed annual compensation.” The guaranteed payment agreement has been in place for the last two fiscal years and continues through the end of this fiscal year next June. It is paid in cash, not share units.

 

The third element of his compensation is variable, but it has nothing to do with the performance of his firm or the accuracy of his forecasting, but rather the popularity of his research, which reaches far beyond Canada: Mr. Rosenberg pocketed $1.08-million in gross pay last year from his share of net revenues generated by the company’s sale of economic research he pens. That’s up from $877,645 the year before, making Mr. Rosenberg one of the few Canadian authors to earn a $1-million a year for his work.

 

Not a bad haul when you consider Mr. Rosenberg made a much publicized shift in his thinking earlier this year, shedding part of his bearish stance to adopt a more bullish view on Canada.

Source: Gluskin Sheff circular


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/THDK2Ug7GpU/story01.htm Tyler Durden