Congress Brings ‘Atlas Shrugged’ To America With This New Bill

Submitted by Simon Black via Sovereign Man blog,

It was known as Directive 10-289, and it was the government’s last-ditch, desperate effort to control the collapsing economy.

The President, along with some of his senior advisors at the Bureau of Economic Planning and National Resources, all widely agreed that the only way out of the crisis was expand government power.

The directive was passed quickly, and among its key provisions:

“Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment. . ."

 

“Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business. . .”

If you’re searching through your favorite news feed right now wondering why you haven’t heard of Directive 10-289, it’s because the law is fictitious. It’s part of the story from Ayn Rand’s Atlas Shrugged.

At that part in the book, the economy was in a full blown crisis.

The government had engineered one emergency after another, and their only idea to ‘fix’ things was to award themsleves even more power and control over the economy… specifically to freeze everything in place.

No one could be fired or quit his/her job. And no business could stop working. It didn’t matter how much money they were losing.

Crazy idea, right? This could never happen in reality… at least not in the West. It sounds like something straight out of the Soviet Union– forcing unprofitable companies to stay in business.

*  *  *

Enter H.R. 5445, the “Postal Jobs Protection Act of 2014″.

I was utterly stunned when I read this. The meat of the bill consists of just 26 words:

“Notwithstanding any other provision of law, no mail processing facility operating as of September 1, 2014, may be closed or consolidated prior to December 31, 2015.”

Let that sink in a minute: they want to pass a law to ensure that NO US postal center can be shut down through the end of next year.

For the sake of context, let’s walk through the numbers.

In its most recent quarter, the US Postal Service lost a massive $1.9 BILLION. That’s far worse than the $699 million loss they rack up over the same quarter last year.

And so far this fiscal year, USPS has lost over $4 billion.

What’s more– the post office has maxed out its $15 billion credit line. They have almost no liquidity left to continue financing operations, they’re not profitable, and they have no capacity left to borrow more money in order to plug the shortfall.

Perhaps most alarming is that, according to the US Postal Service’s own financial statements, its NET worth (i.e. assets minus liabilities) is NEGATIVE $44 billion.

This doesn’t happen by accident. And it’s not the result of some temporary downturn. It takes years… decades of mismanagement and structural issues to reach this point.

Just for kicks, I compared 2-day shipping rates among major carriers in the US for a simple envelope package.

FedEx: $25.12
UPS: $24.16

And the US Postal Service? $5.05 if I order online.

Duh. It doesn’t take a rocket scientist to see the problem here.

Bear in mind that FedEx and UPS are, you know, profitable, earning $3.3 billion and $6.7 billion in pretax income, respectively. (And they each paid an effective tax rate of more than 35%.)

Curiously, when I was in Ethiopia a few weeks ago, there was an article in the local paper there about how profitable the Ethiopian postal service had become.

I mean– postal services around the world have the same problems. A place like Ethiopia has a massive rural population, and it costs a lot to maintain those small offices. Everyone face rising fuel costs and declining volume.

Yet even in Ethiopia they’ve figured it out. They know they can’t continuously run an unprofitable operation, so they reinvent the business model. That’s life.

In fairness, the Postal Service knows what to do. They’re at the end of their rope. And if they’re going to survive, they need to raise revenue and cut costs dramatically.

This includes the uncomfortable prospect of laying off employees and closing down unprofitable processing centers.

But Congress doesn’t want that. And they’re lifting legislation directly from the pages of Atlas Shrugged to ensure the post office keeps operating at a loss.

This is yet another example of incredibly dangerous central planning being planned, proposed, or in progress in the Land of the Free.

Can you see where this trend is going?

*  *  *

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below.
You can Download our Free 17 page Report The 6 Pillars of Self Reliance.




via Zero Hedge http://ift.tt/1wOVC8U Tyler Durden

Congress Brings 'Atlas Shrugged' To America With This New Bill

Submitted by Simon Black via Sovereign Man blog,

It was known as Directive 10-289, and it was the government’s last-ditch, desperate effort to control the collapsing economy.

The President, along with some of his senior advisors at the Bureau of Economic Planning and National Resources, all widely agreed that the only way out of the crisis was expand government power.

The directive was passed quickly, and among its key provisions:

“Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment. . ."

 

“Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business. . .”

If you’re searching through your favorite news feed right now wondering why you haven’t heard of Directive 10-289, it’s because the law is fictitious. It’s part of the story from Ayn Rand’s Atlas Shrugged.

At that part in the book, the economy was in a full blown crisis.

The government had engineered one emergency after another, and their only idea to ‘fix’ things was to award themsleves even more power and control over the economy… specifically to freeze everything in place.

No one could be fired or quit his/her job. And no business could stop working. It didn’t matter how much money they were losing.

Crazy idea, right? This could never happen in reality… at least not in the West. It sounds like something straight out of the Soviet Union– forcing unprofitable companies to stay in business.

*  *  *

Enter H.R. 5445, the “Postal Jobs Protection Act of 2014″.

I was utterly stunned when I read this. The meat of the bill consists of just 26 words:

“Notwithstanding any other provision of law, no mail processing facility operating as of September 1, 2014, may be closed or consolidated prior to December 31, 2015.”

Let that sink in a minute: they want to pass a law to ensure that NO US postal center can be shut down through the end of next year.

For the sake of context, let’s walk through the numbers.

In its most recent quarter, the US Postal Service lost a massive $1.9 BILLION. That’s far worse than the $699 million loss they rack up over the same quarter last year.

And so far this fiscal year, USPS has lost over $4 billion.

What’s more– the post office has maxed out its $15 billion credit line. They have almost no liquidity left to continue financing operations, they’re not profitable, and they have no capacity left to borrow more money in order to plug the shortfall.

Perhaps most alarming is that, according to the US Postal Service’s own financial statements, its NET worth (i.e. assets minus liabilities) is NEGATIVE $44 billion.

This doesn’t happen by accident. And it’s not the result of some temporary downturn. It takes years… decades of mismanagement and structural issues to reach this point.

Just for kicks, I compared 2-day shipping rates among major carriers in the US for a simple envelope package.

FedEx: $25.12
UPS: $24.16

And the US Postal Service? $5.05 if I order online.

Duh. It doesn’t take a rocket scientist to see the problem here.

Bear in mind that FedEx and UPS are, you know, profitable, earning $3.3 billion and $6.7 billion in pretax income, respectively. (And they each paid an effective tax rate of more than 35%.)

Curiously, when I was in Ethiopia a few weeks ago, there was an article in the local paper there about how profitable the Ethiopian postal service had become.

I mean– postal services around the world have the same problems. A place like Ethiopia has a massive rural population, and it costs a lot to maintain those small offices. Everyone face rising fuel costs and declining volume.

Yet even in Ethiopia they’ve figured it out. They know they can’t continuously run an unprofitable operation, so they reinvent the business model. That’s life.

In fairness, the Postal Service knows what to do. They’re at the end of their rope. And if they’re going to survive, they need to raise revenue and cut costs dramatically.

This includes the uncomfortable prospect of laying off employees and closing down unprofitable processing centers.

But Congress doesn’t want that. And they’re lifting legislation directly from the pages of Atlas Shrugged to ensure the post office keeps operating at a loss.

This is yet another example of incredibly dangerous central planning being planned, proposed, or in progress in the Land of the Free.

Can you see where this trend is going?

*  *  *

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

If you liked this post, please click the box below.
You can Download our Free 17 page Report The 6 Pillars of Self Reliance.




via Zero Hedge http://ift.tt/1wOVC8U Tyler Durden

Tonight on The Independents: “The Evolution of Terror”

Evolution IS terror, amirite? |||Tonight’s theme episode of The
Independents
(Fox Business Network, 9 p.m. ET, 6 p.m. PT,
with re-airs three and five hours later) is a timely examination of
The
Evolution of Terror
” in our troubled age. Guests
include:

* Anjem
Choudary
, the controversial British Muslim apologist for Sharia
law and the Islamic State, who will get shouty and shrill about
whether 9/11 was a bad thing & so forth.

* Rosa
Brooks
, the former Pentagon official (2009-2011) and L.A.
Times
columnist (before
that
), who will lay out a
sharp critique
of her former boss’s policies in the Middle
East.

* Brad Thor, thriller
writer
and conservative
commentator
, who will talk about the Department of Homeland
Security’s “Analytical
Red Cell Unit
” of fiction-spinners who help dream up
terrorism scenarios.

* Occidental University historian and Reason
contributor
Thaddeus Russell, who
will talk about the relatively recent history of Arab/Muslim
anti-American terrorism, and also about the contentious theory of
“blowback.”

* Frequent foreign policy guest Michael
Weiss
, who will attempt to describe what life is like under
ISIS.

* Former FBI/Border Patrol agent Cesar Paz, who will warn about the
alleged Islamic threat along the southern border.

* Ex-CIA employee Mike
Baker
, who will describe how Islamic terrorist tactics have
(and have not) changed over the last 13 and 26 years.

It is a wide-ranging, stimulating, and occasionally combative
show, and I think you will like it.

Follow The Independents on Facebook at http://ift.tt/QYHXdB,
follow on Twitter @ independentsFBN, and
click on this page
for more video of past segments.

from Hit & Run http://ift.tt/Zva1JH
via IFTTT

Proposed Ordinance Would Give Cops an Invitation to All the Cool Parties

Suppose you are  a police officer responding
to complaints about a noisy party, and you suspect some of the
guests are younger than 21. In addition to asking the host to turn
down the music when he answers the door, you’d like to come in and
make sure that no minors are drinking. But the host won’t let you
in, and you don’t have a warrant. Ordinarily, that would be the end
of the matter. An
ordinance
under consideration in Montville, New Jersey, would
offer you a third option: Walk in and search the place anyway, as
long as you think you have probable cause to believe teenagers are
drinking inside.

Not surprisingly, the proposal has provoked considerable
controversy, to the point that neither the mayor, the police chief,
nor members of the Montville Township Committee, the community’s
governing body,
would talk
to a local reporter about it. Presumably supporters
of the ordinance are relying on the “exigent circumstances”
exception to the usual Fourth Amendment requirement of a warrant to
search someone’s home without consent. According to a gloss by the U.S.
Court of Appeals for the 9th Circuit, “exigent circumstances are
present when a reasonable person [would] believe that entry…was
necessary to prevent physical harm to the officers or other
persons, the destruction of relevant evidence, the escape of the
suspect, or some other consequence improperly frustrating
legitimate law enforcement efforts.”

If Bud Light disappearing down the gullet of an 18-year-old
counts as “destruction of relevant evidence,” Montville’s town
fathers may be on to something. Otherwise, it seems like a stretch.
And depending on how the average Montville cop interprets probable
cause in this context, the new rule may in practice be an
invitation to every party attended by teenagers (or
20-year-olds).

It’s encouraging that the local CBS station apparently was
unable to find anyone willing to speak on the record in favor of
warrantless home searches to catch adolescent imbibers. “That’s
more of a parent responsibility rather than a police
responsibility,” one parent said. A token teenager added, “It’s not
really their business to be going into people’s houses. If you want
to do that, you need to get a warrant.” For now, at least.

from Hit & Run http://ift.tt/1r7oXYF
via IFTTT

5 Things To Ponder: The Fed

Submitted by Lance Roberts of STA Wealth Management,

It has been quite an eventful week between Scotland's battle over independence, the Federal Reserve's FOMC announcement and the markets making new all time highs.

For Scotland, the decision came down to the benefits of maintaining their unity with the United Kingdom. While William Wallace may not have agreed, the vote to remain part of the U.K., which can not happen again for a generation, removed a potential stumbling block for the markets globally.

 

The FOMC announcement was more comedy than anything else as the continued facade of the Fed's forecasting capabilities was revealed.

However, the reiteration of the Fed's commitment to "remain accommodative" for as long as necessary gave comfort to traders that while the "punch bowl" was no longer being refilled, it was not being taken away either.

However, one announcement from the Fed that did not get a lot of media attention was their new policy to "reduce" the size of the Fed's balance sheet.  The general plan is as follows:

  • Determine timing and pace of normalization
  • Reduce securities holdings and maintain low interest rates
  • Gradually reduce the reinvestment of principal repayments
  • Sell mortgage-backed bonds if warranted.
  • Reduce balance sheet over the longer term to only the size needed to implement policy.

These actions will be taken in conjunction with the Federal Reserve's attempt to normalize interest rate policy.

Importantly, these combined actions constitute the removal of the "punch bowl." While I suspect that Janel Yellen truly believes that the economy is strong enough to support such a process, a look at Japan's failed attempt as creating inflation, boosting economic growth and normalizing policy should give her a clue. This is a topic that I will delve into more deeply next week.

However, for this weekend's list of "Things To Ponder" I have accumulated a few reads relating to the Fed. As always, it is important to eliminate "confirmation bias" be evaluating decisions based on a complete understanding of the argument.

1) Fed Exit May Be A Bumpy Ride For Investors by Ben Eisen and Greg Robb via MarketWatch

This is a good article and MarketWatch delved into the four key policy tools that many market participants believe will be crucial to the exit, looking at how they will function, the market and policy implications, and what questions remain unanswered.

  • Interest rates
  • Reverse repos
  • Excess reserves
  • Managing the balance sheet

"The Federal Reserve’s next tightening cycle won’t look like anything investors have seen before.

 

The central bank has never attempted to hike interest rates with a $4.4 trillion balance sheet. To do so, the Fed is counting on a slew of new instruments — and the liftoff still might not function properly at first.

 

'They will be experimenting with new tools. Any time you do that, there are uncertainties and there are risks. We expect them to be able to manage it, but it could be a bumpy ride,' said Kim Schoenholtz, a professor in New York University’s Stern School of Business."

2) Fed Prepares To Raise Rates, End Failed QE via Real Clear Markets

"The Federal Reserve said Wednesday the economy isn't as strong as it believed just two months ago, and that it's not likely to raise interest rates soon. It's as close to an admission of failure as you'll ever get.

 

As rates rise, big questions remain: Will the higher rates the Fed is engineering sink the economy? Will we see unemployment return to recession levels?

 

It doesn't seem likely. And yet, in 2008, if someone had told you that the Census Bureau would report in September 2014 that median income had shrunk 8.2% over the preceding five years, and only those with the highest incomes would see any gains at all, you might have thought that person was crazy.

 

Well, it happened. Thanks to President Obama's misbegotten economic policies and "stimulus," and the Fed's own radical experiment in money printing, the U.S. has had its worst recovery ever from a recession.

 

To its credit, perhaps, the Fed is now quietly trying to undo its failed experiment, by letting markets set interest rates and shutting down the QE program. If so, it's a minor victory for common sense and policy prudence."

3) Why Fed Bet May End In Disappointment by Mohamed El-Erian via Bloomberg

"The U.S. Federal Reserve is trying to squeeze a bit more out of a stimulus policy that relies heavily on artificially boosting stock and bond markets to generate growth. In doing so, it is running a higher risk of financial instability, and increasing its dependence on a Congress that shows little sign of being able to handle fully its economic responsibilities."

4) Do The Fed's Forecasts Get Marked To Market? by Randall Forsyth via Barron's

"'Don't fight the Fed' is one of the oldest adages on Wall Street. But the financial markets remain at odds with the central bank's own projections for interest rates.

 

…the futures market is casting its dissent in the other direction—that the Fed officials are wrong in expecting faster and bigger rate hikes. That would seem to be a reflection of the markets' recognition that the Fed's forecasts for economic growth have proved mostly too optimistic.

 

Thus, the central bank thinks the U.S. economy is on a path for sustainable 3% growth while the futures market thinks it remains in its "New Normal" path around 2%."

5) The Math Of The "Dot Plot" by James Mackintosh via Financial Times

"[Fed members] all expect rates to start rising next year, and to rise by 175bp by the end of the year. Assuming the Fed sticks to 25bp hikes – although it doesn’t have to, it hasn’t raised rates more than that in a single meeting since May of 2000 – that means raising rates seven times next year.

 

But with the markets completely hung up on the idea that the phrase 'considerable time' in the FOMC statement amounts to a promise not to raise rates for six months – in other words, until April
– it is worth considering that five out of the 17 participants appear to expect rates to go up by March.

 

Janet Yellen, Fed chair, had another go in her press conference today at trying to stop investors assuming that 'considerable time' means six months, saying there is no 'mechanical interpretation' of what it means – but if investors keep thinking it is six months, from the October end of QE, that means the first rate rise won’t come before April. The dots suggest there will be lots of pressure within the FOMC for a rise before that. Bond markets should wake up to the risk."

Bonus Reads:

IMF Warns Of Risks From Excessive Financial Market Bets via Reuters

Seth Klarman: "We Are Recreating The Markets Of 2007" via ZeroHedge

Stocks Up As Sun Unexpectedly Rises via Sigmund Holmes


…and a little blast from the past from "Good Times" as the "Secret Of The Fed" is given away.




via Zero Hedge http://ift.tt/1r7n4eA Tyler Durden

Algos Gone Wild: BABA “Glitch” Halted 7 Seconds, “100s Of Flash Crashes” Into Close

As business media pats itself on the back for the BABA IPO, proclaiming how it’s the most important, and biggest IPO of all-time and on “the most efficient and transparent” exchange, perhaps it was just oversight that they forgot to mention BABA’s 7-second halt “glitch” this afternoon as BABA trading exceeded 25% of all volume at some points. But that was minor compared to the utter clusterfuck that occurred as AAPL shares started to tumble and, as Nanex points out, 100s of individual stocks instantly flash-crashed and dashed by over 1% at 1550ET. These are your unrigged, transparent, efficient markets…

 

Via Nanex,

BABA Algo trading was massive…

 


 

BABA’s Glitch…

 

 

Then as AAPL starts to slip… (BTW, WTF after-hours?)

 

100s of individual stocks explode instantly in flash-crashed and dashes…

 

*  *  *

Do any of these charts look like the “efficient, transparent” markets we are told about every day?




via Zero Hedge http://ift.tt/1r84RfV Tyler Durden

Algos Gone Wild: BABA "Glitch" Halted 7 Seconds, "100s Of Flash Crashes" Into Close

As business media pats itself on the back for the BABA IPO, proclaiming how it’s the most important, and biggest IPO of all-time and on “the most efficient and transparent” exchange, perhaps it was just oversight that they forgot to mention BABA’s 7-second halt “glitch” this afternoon as BABA trading exceeded 25% of all volume at some points. But that was minor compared to the utter clusterfuck that occurred as AAPL shares started to tumble and, as Nanex points out, 100s of individual stocks instantly flash-crashed and dashed by over 1% at 1550ET. These are your unrigged, transparent, efficient markets…

 

Via Nanex,

BABA Algo trading was massive…

 


 

BABA’s Glitch…

 

 

Then as AAPL starts to slip… (BTW, WTF after-hours?)

 

100s of individual stocks explode instantly in flash-crashed and dashes…

 

*  *  *

Do any of these charts look like the “efficient, transparent” markets we are told about every day?




via Zero Hedge http://ift.tt/1r84RfV Tyler Durden

44,107,000 Reasons Why NFL Commissioner Roger Goodell Has “Not Considered Resigning”

 

Moments ago NFL Commissioner Roger Goodell concluded a press conference in which he discussed NFL player conduct, domestic violence, sexual assaults, sponsorships, and other things. The one thing that caught our attention is that when he was asked if he had considered resigning, his answer was a resounding “No.” For all those wondering why the commissioner of this non-profit, tax-exempt 501(c)(6) organization has not considered calling it quits despite the ongoing public opinion firestorm, here is the reason. Or rather 44,107,000 reasons.

Source




via Zero Hedge http://ift.tt/1r7ejBg Tyler Durden