Category: zerohedge

Submitted by Michael Snyder of The Economic Collapse blog,

Did you know that there are more than 102 million working age Americans that do not have a job?  Yes, I know that number sounds absolutely crazy, but it is true.  Right now, there are more than 11 million Americans that are considered to be "officially unemployed", and there are more than 91 million Americans that are not employed and that are considered to be "not in the labor force".  When you add those two numbers together, the total is more than 102 million.  Overall, the number of working age Americans that do not have a job has increased by about 27 million since the year 2000. 

But aren't things getting better?  After all, the mainstream media is full of headlines about how "good" the jobs numbers for October were.  Sadly, the truth is that the mainstream media is not being straight with the American people.  As you will see below, we are in the midst of a long-term unemployment crisis in America, and things got even worse last month.

In this day and age, it is absolutely imperative that people start thinking for themselves.  Just because the media tells you that something is true does not mean that it actually is.  If unemployment was actually going down, the percentage of the working age population that has a job should actually be going up.  As you are about to see, that is simply not the case.  The following are 10 facts about the growing unemployment crisis in America that will blow your mind…

#1 The percentage of working age Americans with a job fell to 58.3 percent in October.  The lowest that number has been at any point since the year 2000 is 58.2 percent.  In other words, there has been absolutely no "jobs recovery".  During the last recession, the civilian employment-population ratio dropped from about 63 percent to below 59 percent and it has stayed there for 50 months in a row.  Will the percentage of working age Americans with a job soon drop below the 58 percent mark?…

#2 The U.S. economy lost 623,000 full-time jobs last month.  But we are being told to believe that the economy is actually getting "better".

#3 The number of American women with a job fell by 357,000 during the month of October.

#4 The average duration of unemployment in October 2013 was nearly three times as long as it was in October 2000.

#5 The number of Americans "not in the labor force" increased by an astounding 932,000 during October.  In other words, the Obama administration would have us believe that nearly a million people "disappeared" from the U.S. labor force in a single month.

#6 The number of Americans "not in the labor force" has grown by more than 11 million since Barack Obama first entered the White House.

#7 In October, the U.S. labor force participation rate fell from 63.2 percent to 62.8 percent.  It is now the lowest that it has been since 1978.  Below is a chart which shows how the labor force participation rate has been steadily declining since the year 2000.  How can the economy be "healthy" if the percentage of Americans that are participating in the labor force is continually declining?…

#8 If the labor force participation rate was still at the same level it was at when Barack Obama was elected in 2008, the official unemployment rate would be about 11 percent right now.

#9 Even if you are working, that does not mean that you are able to take care of yourself and your family without any help.  In fact, approximately one out of every four part-time workers in America is living below the poverty line.

#10 In January 2000, there were 75 million working age Americans that did not have a job.  Today, there are 102 million working age Americans that do not have a job.

So what are our politicians doing to fix this?

Shouldn't they be working night and day to solve this crisis?

After all, Barack Obama once made the following promise to the American people…

"But I want you all to know, I will not rest until anybody who's looking for a job can find one — and I'm not talking about just any job, but good jobs that give every American decent wages and decent benefits and a fair shot at the American Dream."

Unfortunately, things have not improved since Obama made that promise, but he has found the time to play 150 rounds of golf since he has been president.

Meanwhile, because there aren't enough jobs, the number of Americans living in poverty continues to grow.

As I wrote about the other day, according to new numbers that were just released an all-time high 49.7 million Americans are living in poverty.

And right now 1.2 million public school students in the United States are homeless.  For many more statistics like this, please see my previous article entitled "29 Incredible Facts Which Prove That Poverty In America Is Absolutely Exploding".

The only thing that most Americans have to offer in the marketplace is their labor.  If they can't find a job, they don't have any other way to take care of themselves and their families.

The future of the middle class in America depends upon the creation of good jobs.  It really doesn't matter how far the quantitative easing that the Federal Reserve has been doing pumps up the current stock market bubble.  The American people were told that "economic stimulus" was the reason for doing all of this reckless money printing, but the percentage of working age Americans with a job is now actually lower than it was four years ago.  Quantitative easing has been a complete and total failure in the job creation department, and it is doing a tremendous amount of long-term damage to our financial system.

The really frightening thing is that the Federal Reserve and the federal government have supposedly been doing all they can to try to "create jobs" and they have utterly failed.  In fact, this is the first time in the post-World War II era that we have not seen an employment recovery following a recession.

And now the next wave of the economic collapse is rapidly approaching.  What that hits us, millions more Americans will lose their jobs.

So the truth is that this is just the beginning of the unemployment crisis in America.

Yes, things are bad now, but soon they will get much worse.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/8mlOofVpO5s/story01.htm Tyler Durden

“We need help!” is the sad handwritten sign hanging outside a shuttered church in the Philippine town of Tacloban surrounded, as Reuters reports, by uncollected corpses and canyons of debris. Demand for relief is huge and despite 66 tons of supplies having landed since Saturday, they are not reaching those who need them the most as “people are roaming around the city, looking for food and water,” because aid trucks from the airport struggle to enter the city because of the stream of people and vehicles leaving it. “People are angry. They are going out of their minds,” warned one aid-worker as relief was delayed due to security concerns “there might be a stampede,” after dark. The terrible state of affairs is summed up by on aid worker, “there is nothing left to loot… even if you have money there is no food to buy. There is nothing here.” Police are trying to enforce a curfew…

 

 

Some context… (via @colinjones)

 

 

The Human Side…

(Via Reuters,)

Tacloban city administrator Tecson Juan Lim says the death toll in this city alone “could go up to 10,000.”

 

At least a dozen U.S. and Philippines military cargo planes arrived on Monday, with the Philippine air force saying it had flown in about 60,000 kg (66 tons) of relief supplies since Saturday. But the demand is huge and the supplies aren’t reaching those who need it most.

 

“People are roaming around the city, looking for food and water,”

 

…

 

Pedrosa, the government aid worker, said security concerns prevented supplies from being handed out after dark.

 

“There might be a stampede,” he said.

 

The aid truck was guarded by soldiers toting assault rifles. “It’s risky,” said Jewel Ray Marcia, a Philippine army lieutenant who led the unit.

 

“People are angry. They are going out of their minds.”

 

…

 

Earlier on Monday, said Pedrosa, soldiers fired warning shots into the air to stop people stealing fuel from a petrol station.

 

…

 

People were still emptying one warehouse of rice and loading it onto carts and motorcycles. No police or soldiers stopped them.

 

A handwritten sign pinned to a makeshift police checkpoint near a looted department store warned of an 8 p.m. to 5 a.m. curfew.

 

But there is another reason the looting had abated.

 

“There is nothing left to loot,” said Pedrosa.

 

…

 

Officials attribute the high death toll to the many people who stayed behind to protect their property and were swept away in a storm surge of water and lacerating debris.

 

…

 

“My house just dissolved in the water,” she said.

 

Saraza now struggles to feed her children.

 

…

 

“My house is destroyed,” he said. “Even if you have money there is no food to buy. There is nothing here.”

 

The Costs…

(via Bloomberg)

Philippine President Benigno Aquino declared a state of calamity to speed aid to communities ravaged by super Typhoon Haiyan

 

…

 

The government has 18.7 billion pesos ($429 million) to fund reconstruction

 

…

 

“The 18.7 billion pesos the president mentioned is probably just an initial amount because it’s not going to be enough,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc., the nation’s largest lender. “Given still low interest rates and huge amounts of liquidity in the domestic market, the government may consider selling bonds to fund the rebuilding.”

 

…

 

The state of calamity will “accelerate the efforts of the government to render aid and to rehabilitate the provinces ravaged by Yolanda,”

…

 

Haiyan’s total economic impact may reach $14 billion, about $2 billion of which will be insured, according to a report by Jonathan Adams, a senior analyst at Bloomberg Industries, citing Kinetic Analysis Corp.

 

Gross domestic product in areas hit by the typhoon may decline as much as 8 percent next year, Finance Secretary Cesar Purisima said in a mobile-phone message, citing preliminary estimates. The regions affected account for about 12.5 percent of the nation’s output, he said.

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

“We need help!” is the sad handwritten sign hanging outside a shuttered church in the Philippine town of Tacloban surrounded, as Reuters reports, by uncollected corpses and canyons of debris. Demand for relief is huge and despite 66 tons of supplies having landed since Saturday, they are not reaching those who need them the most as “people are roaming around the city, looking for food and water,” because aid trucks from the airport struggle to enter the city because of the stream of people and vehicles leaving it. “People are angry. They are going out of their minds,” warned one aid-worker as relief was delayed due to security concerns “there might be a stampede,” after dark. The terrible state of affairs is summed up by on aid worker, “there is nothing left to loot… even if you have money there is no food to buy. There is nothing here.” Police are trying to enforce a curfew…

 

 

Some context… (via @colinjones)

 

 

The Human Side…

(Via Reuters,)

Tacloban city administrator Tecson Juan Lim says the death toll in this city alone “could go up to 10,000.”

 

At least a dozen U.S. and Philippines military cargo planes arrived on Monday, with the Philippine air force saying it had flown in about 60,000 kg (66 tons) of relief supplies since Saturday. But the demand is huge and the supplies aren’t reaching those who need it most.

 

“People are roaming around the city, looking for food and water,”

 

…

 

Pedrosa, the government aid worker, said security concerns prevented supplies from being handed out after dark.

 

“There might be a stampede,” he said.

 

The aid truck was guarded by soldiers toting assault rifles. “It’s risky,” said Jewel Ray Marcia, a Philippine army lieutenant who led the unit.

 

“People are angry. They are going out of their minds.”

 

…

 

Earlier on Monday, said Pedrosa, soldiers fired warning shots into the air to stop people stealing fuel from a petrol station.

 

…

 

People were still emptying one warehouse of rice and loading it onto carts and motorcycles. No police or soldiers stopped them.

 

A handwritten sign pinned to a makeshift police checkpoint near a looted department store warned of an 8 p.m. to 5 a.m. curfew.

 

But there is another reason the looting had abated.

 

“There is nothing left to loot,” said Pedrosa.

 

…

 

Officials attribute the high death toll to the many people who stayed behind to protect their property and were swept away in a storm surge of water and lacerating debris.

 

…

 

“My house just dissolved in the water,” she said.

 

Saraza now struggles to feed her children.

 

…

 

“My house is destroyed,” he said. “Even if you have money there is no food to buy. There is nothing here.”

 

The Costs…

(via Bloomberg)

Philippine President Benigno Aquino declared a state of calamity to speed aid to communities ravaged by super Typhoon Haiyan

 

…

 

The government has 18.7 billion pesos ($429 million) to fund reconstruction

 

…

 

“The 18.7 billion pesos the president mentioned is probably just an initial amount because it’s not going to be enough,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc., the nation’s largest lender. “Given still low interest rates and huge amounts of liquidity in the domestic market, the government may consider selling bonds to fund the rebuilding.”

 

…

 

The state of calamity will “accelerate the efforts of the government to render aid and to rehabilitate the provinces ravaged by Yolanda,”

…

 

Haiyan’s total economic impact may reach $14 billion, about $2 billion of which will be insured, according to a report by Jonathan Adams, a senior analyst at Bloomberg Industries, citing Kinetic Analysis Corp.

 

Gross domestic product in areas hit by the typhoon may decline as much as 8 percent next year, Finance Secretary Cesar Purisima said in a mobile-phone message, citing preliminary estimates. The regions affected account for about 12.5 percent of the nation’s output, he said.

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

It would appear that the Horatio Alger myth – that hard work and pluck will lift a person from dire circumstances to enviable success – is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots – "this is what we call the 'parental penalty,' and it's really high in the U.S. – If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."

 

Via WSJ,

…only 4% of Americans travel the rags-to-riches path, according to new research from the Economic Mobility Project of the Pew Charitable Trusts.

 

…a great many  who are born into the poorest segments of the population are stuck there for life, a finding that suggests the U.S. has much to do to improve social mobility.

 

Forty-three percent of Americans raised in the bottom quintile of household income remain there a generation later (with income of less than $28,900 in 2009 dollars, adjusted for family size). Twenty-seven percent rise up slightly into the second quintile, 17% land in the middle of the distribution, and 9% end up in the 4th quintile.

 

…

 

Fed researchers looked at mobility for all Americans. They discovered considerable “stickiness” at both ends of the income spectrum. In other words, poor or wealthy children are most likely to stay in their respective wealth brackets as adults.

 

…

 

In a birthright economy – think India’s old caste system – 100% of individuals would remain in the economic category they’re born into. In an ‘equal chance’ economy, socioeconomic status would change in a random but predictable way, with 20% of people staying where they are and 20% moving into each of the other categories (imagine a lottery machine where 100 balls pop around a tank and 20 are randomly funneled into each of five different baskets).

 

…

 

But Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots.

 

In Sweden, Finland, Norway, Denmark and the United Kingdom, between 25% and 30% of people stay in the bottom quintile, according to Daly, compared to the 44% in the U.S.

 

“This is what we call the ‘parental penalty,’ and it’s really high in the U.S.,” she said. “If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher.”

 

…

 

and while there is plenty to worry about there, the last paragraph of Weber's note is perhaps the most worrisome in terms of the Fed's current policies…

Americans who moved up from the bottom had at least nine times more wealth than those who were stuck — $8,892 for people with no upward mobility versus $78,005 for people who moved one rung up and $94,586 for those who made it at least to the middle.

 

Especially in a nation where work is increasingly punished…

As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

 

 

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and… have the same disposable income at the end of the day.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NIviVvts1b0/story01.htm Tyler Durden

It would appear that the Horatio Alger myth – that hard work and pluck will lift a person from dire circumstances to enviable success – is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots – "this is what we call the 'parental penalty,' and it's really high in the U.S. – If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."

 

Via WSJ,

…only 4% of Americans travel the rags-to-riches path, according to new research from the Economic Mobility Project of the Pew Charitable Trusts.

 

…a great many  who are born into the poorest segments of the population are stuck there for life, a finding that suggests the U.S. has much to do to improve social mobility.

 

Forty-three percent of Americans raised in the bottom quintile of household income remain there a generation later (with income of less than $28,900 in 2009 dollars, adjusted for family size). Twenty-seven percent rise up slightly into the second quintile, 17% land in the middle of the distribution, and 9% end up in the 4th quintile.

 

…

 

Fed researchers looked at mobility for all Americans. They discovered considerable “stickiness” at both ends of the income spectrum. In other words, poor or wealthy children are most likely to stay in their respective wealth brackets as adults.

 

…

 

In a birthright economy – think India’s old caste system – 100% of individuals would remain in the economic category they’re born into. In an ‘equal chance’ economy, socioeconomic status would change in a random but predictable way, with 20% of people staying where they are and 20% moving into each of the other categories (imagine a lottery machine where 100 balls pop around a tank and 20 are randomly funneled into each of five different baskets).

 

…

 

But Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots.

 

In Sweden, Finland, Norway, Denmark and the United Kingdom, between 25% and 30% of people stay in the bottom quintile, according to Daly, compared to the 44% in the U.S.

 

“This is what we call the ‘parental penalty,’ and it’s really high in the U.S.,” she said. “If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher.”

 

…

 

and while there is plenty to worry about there, the last paragraph of Weber's note is perhaps the most worrisome in terms of the Fed's current policies…

Americans who moved up from the bottom had at least nine times more wealth than those who were stuck — $8,892 for people with no upward mobility versus $78,005 for people who moved one rung up and $94,586 for those who made it at least to the middle.

 

Especially in a nation where work is increasingly punished…

As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

 

 

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and… have the same disposable income at the end of the day.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NIviVvts1b0/story01.htm Tyler Durden

Bloomberg may be in hot water for scuttling an article that “might anger China” as exposed over the weekend, but that was only after winning investigative prizes for its series of reports exposing the epic wealth of China top ruling families in 2012: a topic that has received prominence at a time when the forced wealth redistribution plans of developed and developing nations, usually originated by these same uber-wealthy families, is all the rage. Another country, whose oligarchic wealth had largely escaped press scrutiny, was Iran. At least until today, when in a six month investigation culminating in a three-part report on the assets of the Iranian Supreme Leader Ayatollah Ali Khamenei, Reuters exposed Setad, an Iranian company that manages and sells property on order from the Imam.

In a nutshell, the company has built up its wealth by seizing thousands of properties from Iranian citizens. According to the investigation, Setad’s assets are worth $95 billion – 40 percent more than Iran’s total 2012 oil exports. It is this confiscated “wealth” that has allowed the Iranian clergy, and especially the Ayatollah, to preserve their power over the years.

In a little more than a nutshell, Reuters explains just who Setad is:

Pari Vahdat-e-Hagh ultimately lost her property. It was taken by an organization that is controlled by the most powerful man in Iran: Supreme Leader Ayatollah Ali Khamenei. She now lives alone in a cramped, three-room apartment in Europe, thousands of miles from Tehran.

 

The Persian name of the organization that hounded her for years is “Setad Ejraiye Farmane Hazrate Emam” – Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic’s first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. His order spawned a new entity to manage and sell properties abandoned in the chaotic years after the 1979 Islamic Revolution.

 

Setad has become one of the most powerful organizations in Iran, though many Iranians, and the wider world, know very little about it. In the past six years, it has morphed into a business juggernaut that now holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming.

 

The organization’s total worth is difficult to pinpoint because of the secrecy of its accounts. But Setad’s holdings of real estate, corporate stakes and other assets total about $95 billion, Reuters has calculated. That estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department.

 

Just one person controls that economic empire – Khamenei. As Iran’s top cleric, he has the final say on all governmental matters. His purview includes his nation’s controversial nuclear program, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended Sunday without an agreement. It is Khamenei who will set Iran’s course in the nuclear talks and other recent efforts by the new president, Hassan Rouhani, to improve relations with Washington.

Unlike developed nations, where the first priority of the super rich is to flaunt their wealth, Iran’s supreme leader lives a spartan lifestyle and has not been found to abuse the massive monetary holdings of Setad. However, as Reuters points out, “Setad has empowered him. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in 1979.”

Logically, the next question is just how did Setad accumulate its vast asset holdings. The answer, just as logically, is simple: confiscation.

How Setad came into those assets also mirrors how the deposed monarchy obtained much of its fortune – by confiscating real estate. A six-month Reuters investigation has found that Setad built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians: members of religious minorities like Vahdat-e-Hagh, who is Baha’i, as well as Shi’ite Muslims, business people and Iranians living abroad.

 

Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners.

Just like in the US where the 1% effectively have molded the status quo into a wealth preservation mechanism, with profound control over not only the capital markets and the regulatory framework but over all three branches of government (simply note how many bankers have gone to prison for the systemic crash of 2008), so in Iran the Ayatollah has shaped society in a way that will ultimately benefit first and foremost him, as well as not only preserve his wealth but facilitate even greater accumulation of confiscated assets under any and all pretexts.

The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad’s asset acquisitions. “No supervisory organization can question its property,” said Naghi Mahmoudi, an Iranian lawyer who left Iran in 2010 and now lives in Germany.

 

Khamenei’s grip on Iran’s politics and its military forces has been apparent for years. The investigation into Setad shows that there is a third dimension to his power: economic might. The revenue stream generated by Setad helps explain why Khamenei has not only held on for 24 years but also in some ways has more control than even his revered predecessor. Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran’s messy factional infighting.

Like every usurpation of power and wealth, Setad’s beginnings were humble and, to an extent, noble.

When Khomeini, the first supreme leader, set in motion the creation of Setad, it was only supposed to manage and sell properties “without owners” and direct much of the proceeds to charity. Setad was to use the funds to assist war veterans, war widows “and the downtrodden.” According to one of its co-founders, Setad was to operate for no more than two years.

 

Setad has built schools, roads and health clinics, and provided electricity and water in rural and impoverished areas. It has assisted entrepreneurs in development projects. But philanthropy is just a small part of Setad’s overall operations.

One can probably imagine that the founders of the Fed also had noble intentions. Instead they created a dormant century-old monster, intervening in the economy to preserve the wealth of the American financial oligarchy, and whose wealth-transfer capacity has only emerged on the scene in the past five years. So it is not surprising that as absolute power corrupts absolutely, so it is in Iran as it is in the US:

Under Khamenei’s control, Setad began acquiring property for itself, and kept much of the funds rather than simply redistributing them. With those revenues, the organization also helps to fund the ultimate seat of power in Iran, the Beite Rahbar, or Leader’s House, according to a former Setad employee and other people familiar with the matter. The first supreme leader, Khomeini, had a small staff. To run the country today, Khamenei employs about 500 people in his administrative offices, many recruited from the military and security services.

The full Reuters article, the first of three, has much more detail on the asset holdings of the Setad, on its expropriation strategies, on the cover up to hide the full extent of the organization’s involvement in society, and much more, however the broad strokes will be largely familiar to those acquainted with the tactics of any and every oligarch – be they clergical, political or financial – when preservation of power through wealth and money (and confiscation thereof) is the only prerogative.

And while Iran’s wealth confiscation scheme may be extreme by Western standards, at least it is a honest daylight robbery, but what’s worse is that it pales in comparison to what goes on every month not in some enclave of despotic banana republicanism, but the US itself.

Because putting Setad’s $95 billion in estimated assets in context, these amount to just over 5 weeks of the Fed’s QE, which for those who are not worried about losing their “access journalistic” credentials and are willing to call a spade a spade, is merely asset confiscation and wealth transfer of the most insidious type: one where those whose assets are handed over to the wealthy, are oblivious of what has just happened and are in fact grateful for the privilege of having been robbed under the auspices of the “fairness doctrine” and for the pursuit of the “greater good.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QpPiA1YSNlA/story01.htm Tyler Durden

Bloomberg may be in hot water for scuttling an article that “might anger China” as exposed over the weekend, but that was only after winning investigative prizes for its series of reports exposing the epic wealth of China top ruling families in 2012: a topic that has received prominence at a time when the forced wealth redistribution plans of developed and developing nations, usually originated by these same uber-wealthy families, is all the rage. Another country, whose oligarchic wealth had largely escaped press scrutiny, was Iran. At least until today, when in a six month investigation culminating in a three-part report on the assets of the Iranian Supreme Leader Ayatollah Ali Khamenei, Reuters exposed Setad, an Iranian company that manages and sells property on order from the Imam.

In a nutshell, the company has built up its wealth by seizing thousands of properties from Iranian citizens. According to the investigation, Setad’s assets are worth $95 billion – 40 percent more than Iran’s total 2012 oil exports. It is this confiscated “wealth” that has allowed the Iranian clergy, and especially the Ayatollah, to preserve their power over the years.

In a little more than a nutshell, Reuters explains just who Setad is:

Pari Vahdat-e-Hagh ultimately lost her property. It was taken by an organization that is controlled by the most powerful man in Iran: Supreme Leader Ayatollah Ali Khamenei. She now lives alone in a cramped, three-room apartment in Europe, thousands of miles from Tehran.

 

The Persian name of the organization that hounded her for years is “Setad Ejraiye Farmane Hazrate Emam” – Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic’s first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. His order spawned a new entity to manage and sell properties abandoned in the chaotic years after the 1979 Islamic Revolution.

 

Setad has become one of the most powerful organizations in Iran, though many Iranians, and the wider world, know very little about it. In the past six years, it has morphed into a business juggernaut that now holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming.

 

The organization’s total worth is difficult to pinpoint because of the secrecy of its accounts. But Setad’s holdings of real estate, corporate stakes and other assets total about $95 billion, Reuters has calculated. That estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department.

 

Just one person controls that economic empire – Khamenei. As Iran’s top cleric, he has the final say on all governmental matters. His purview includes his nation’s controversial nuclear program, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended Sunday without an agreement. It is Khamenei who will set Iran’s course in the nuclear talks and other recent efforts by the new president, Hassan Rouhani, to improve relations with Washington.

Unlike developed nations, where the first priority of the super rich is to flaunt their wealth, Iran’s supreme leader lives a spartan lifestyle and has not been found to abuse the massive monetary holdings of Setad. However, as Reuters points out, “Setad has empowered him. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in 1979.”

Logically, the next question is just how did Setad accumulate its vast asset holdings. The answer, just as logically, is simple: confiscation.

How Setad came into those assets also mirrors how the deposed monarchy obtained much of its fortune – by confiscating real estate. A six-month Reuters investigation has found that Setad built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians: members of religious minorities like Vahdat-e-Hagh, who is Baha’i, as well as Shi’ite Muslims, business people and Iranians living abroad.

 

Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners.

Just like in the US where the 1% effectively have molded the status quo into a wealth preservation mechanism, with profound control over not only the capital markets and the regulatory framework but over all three branches of government (simply note how many bankers have gone to prison for the systemic crash of 2008), so in Iran the Ayatollah has shaped society in a way that will ultimately benefit first and foremost him, as well as not only preserve his wealth but facilitate even greater accumulation of confiscated assets under any and all pretexts.

The supreme leader also oversaw the creation of a body of legal rulings and executive orders that enabled and safeguarded Setad’s asset acquisitions. “No supervisory organization can question its property,” said Naghi Mahmoudi, an Iranian lawyer who left Iran in 2010 and now lives in Germany.

 

Khamenei’s grip on Iran’s politics and its military forces has been apparent for years. The investigation into Setad shows that there is a third dimension to his power: economic might. The revenue stream generated by Setad helps explain why Khamenei has not only held on for 24 years but also in some ways has more control than even his revered predecessor. Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran’s messy factional infighting.

Like every usurpation of power and wealth, Setad’s beginnings were humble and, to an extent, noble.

When Khomeini, the first supreme leader, set in motion the creation of Setad, it was only supposed to manage and sell properties “without owners” and direct much of the proceeds to charity. Setad was to use the funds to assist war veterans, war widows “and the downtrodden.” According to one of its co-founders, Setad was to operate for no more than two years.

 

Setad has built schools, roads and health clinics, and provided electricity and water in rural and impoverished areas. It has assisted entrepreneurs in development projects. But philanthropy is just a small part of Setad’s overall operations.

One can probably imagine that the founders of the Fed also had noble intentions. Instead they created a dormant century-old monster, intervening in the economy to preserve the wealth of the American financial oligarchy, and whose wealth-transfer capaci
ty has only emerged on the scene in the past five years. So it is not surprising that as absolute power corrupts absolutely, so it is in Iran as it is in the US:

Under Khamenei’s control, Setad began acquiring property for itself, and kept much of the funds rather than simply redistributing them. With those revenues, the organization also helps to fund the ultimate seat of power in Iran, the Beite Rahbar, or Leader’s House, according to a former Setad employee and other people familiar with the matter. The first supreme leader, Khomeini, had a small staff. To run the country today, Khamenei employs about 500 people in his administrative offices, many recruited from the military and security services.

The full Reuters article, the first of three, has much more detail on the asset holdings of the Setad, on its expropriation strategies, on the cover up to hide the full extent of the organization’s involvement in society, and much more, however the broad strokes will be largely familiar to those acquainted with the tactics of any and every oligarch – be they clergical, political or financial – when preservation of power through wealth and money (and confiscation thereof) is the only prerogative.

And while Iran’s wealth confiscation scheme may be extreme by Western standards, at least it is a honest daylight robbery, but what’s worse is that it pales in comparison to what goes on every month not in some enclave of despotic banana republicanism, but the US itself.

Because putting Setad’s $95 billion in estimated assets in context, these amount to just over 5 weeks of the Fed’s QE, which for those who are not worried about losing their “access journalistic” credentials and are willing to call a spade a spade, is merely asset confiscation and wealth transfer of the most insidious type: one where those whose assets are handed over to the wealthy, are oblivious of what has just happened and are in fact grateful for the privilege of having been robbed under the auspices of the “fairness doctrine” and for the pursuit of the “greater good.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QpPiA1YSNlA/story01.htm Tyler Durden

"It will end badly," Marc Faber explains in this brief CNBC clip, "the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first." If you thought that "we had a credit crisis in 2008 because we had too much credit in the economy," then Faber notes "there is that much more credit as a percent of the economy now." Of course, as Bill Fleckenstein recently noted, as long as stocks are rising, investors remain blinded by the exuberance, but as Faber concludes, "we are in a worse position than we were back then," and inflation is already here…

 

 

On China's explosive credit growth:

"Look at China, its credit as a percent of the economy has increased by 50 percent in the last 4-1/2 years. This is the fastest credit growth you can imagine in the whole of Asia,"

On the inevitable endgame:

"It will end badly and the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first,"

On the hidden inflation impacts around the world:

"Why are so many product prices in Singapore and Hong Kong more expensive than in the U.S.? It's because when you have asset inflation and high property prices, shops have to pay higher rents, so they charge more for their products. So asset inflation can flow into consumer inflation,"

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_2BUFSrV2O8/story01.htm Tyler Durden

"It will end badly," Marc Faber explains in this brief CNBC clip, "the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first." If you thought that "we had a credit crisis in 2008 because we had too much credit in the economy," then Faber notes "there is that much more credit as a percent of the economy now." Of course, as Bill Fleckenstein recently noted, as long as stocks are rising, investors remain blinded by the exuberance, but as Faber concludes, "we are in a worse position than we were back then," and inflation is already here…

 

 

On China's explosive credit growth:

"Look at China, its credit as a percent of the economy has increased by 50 percent in the last 4-1/2 years. This is the fastest credit growth you can imagine in the whole of Asia,"

On the inevitable endgame:

"It will end badly and the question is whether we will have a minor economic crisis and then huge money printing or get into an inflationary spiral first,"

On the hidden inflation impacts around the world:

"Why are so many product prices in Singapore and Hong Kong more expensive than in the U.S.? It's because when you have asset inflation and high property prices, shops have to pay higher rents, so they charge more for their products. So asset inflation can flow into consumer inflation,"

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_2BUFSrV2O8/story01.htm Tyler Durden

Submitted by Lance Roberts of STA Wealth Management,

I recently posted a piece entitled "The Economy In Pictures" wherein I shared a series of economic charts using annualized trend analysis.  The purpose of the post was not to espouse a personal viewpoint on the health of the economy, or lack thereof, but to allow you to view the data and draw your own conclusions.  As I stated:

"With the economy now more than 4 years into an expansion, which is long by historical standards, the question for you to answer by looking at the charts below is:

'Are we closer to an economic recession or a continued expansion?'

 

How you answer that question should have a significant impact on your investment outlook as financial markets tend to lose roughly 30% on average during recessionary periods.  However, with margin debt at record levels, earnings deteriorating and junk bond yields near all-time lows, this is hardly a normal market environment within which we are currently invested.

 

Therefore, I present a series of charts which view the overall economy from the same perspective utilizing an annualized rate of change.   In some cases, where the data is extremely volatile, I have used a 3-month average to expose the underlying data trend.   Any other special data adjustments are noted below."

This week I bring you "The Market In Pictures"

There is currently a debate being waged on Wall Street.  On one side of the argument are individuals who believe that we have entered into the next "secular bull market"  and that the markets have only just begun what is an expected multi-year advance from current levels.  The other side of the argument reiterates that the current market advance is predicated on artificial stimulus and that the "secular bear market" remains intact, and the next major reversion is just a function of time. 

The series of charts below is designed to allow you to draw your own conclusions.  I have only included commentary where necessary to clarify chart construction or analysis.

*****

Valuation Measures

The following chart shows Tobin's "Q" ratio and Robert Shillers "Cyclically Adjusted P/E (CAPE)" ratio versus the S&P 500. James Tobin of Yale University, Nobel laureate in economics, hypothesized that the combined market value of all the companies on the stock market should be about equal to their replacement costs. The Q ratio is calculated as the market value of a company divided by the replacement value of the firm's assets.  Dr. Robert Shiller, also a Nobel Prize winning Yale professor, created CAPE to smooth earnings variations and volatility over time.  CAPE is calculated by taking the S&P 500 and dividing it by the average of ten years worth of earnings.  If the ratio is above the long-term average of around 16x, the stock market is considered expensive. Currently, the CAPE is at 24.42x, and the Q-ratio is at 1.00.

My friend Doug Short regularly publishes Ed Easterling's valuation work.  Ed Easterling, Crestmont Research, has done extensive studies on valuation and resulting long term returns.

 The next two charts are variants on Robert Shiller's CAPE.  The first is just a pure analysis of CAPE as compared to the S&P 500.

The next chart shows the deviation of valuations from their long term average.

Are stocks truly reflecting the economy?

One of Warren Buffet's favorite valuation measures is Market Cap to GDP.  I have modified this analysis utilizing real, inflation adjusted, S&P 500 market capitalization as compared to real GDP.

Since the stock market should be a reflection of the underlying economy, then the amount of leverage, or margin debt, in the market as a percentage of GDP could provide an important clue.

Deviation Measures

The following charts are measures of deviation from underlying trends or averages.  The greater the deviation from the long term trends or averages; the probability of a reversion back to, or beyond, those trends or averages increases.  The first chart is the deviation of earnings from the underlying long term growth trend of earnings.

The next chart is the deviation in price of both the S&P 500 and Wilshire 5000 from the 36-Month moving average.  For more discussion on this chart read this.

The chart below is the same basic analysis but utilizing a 50-week moving average which is a more "real-time" variation.

The volatility index (VIX) is representative of investors "fear" of a correction in the market.   Low levels represent investor complacency and no fear of a market correction.

Just For Good Measure

This past week John Hussman tweeted this chart of the S&P 500 that lists all of the warnings signs of a crash that we are experiencing now.  

"Anatomy of textbook pre-crash bubble. Don't rely on further blowoff, but don't be shocked. Risk dominates. Hold tight."

This analysis, along with the economic data I posted recently, tells us much about where we are within the current economic and market cycle.  While it is certainly easy to be swept up in the daily advances of the stock market casino, it is important to remember that eventually the "house always wins."  What has always separated successful professional gamblers from the weekend sucker is strictly the difference of knowing when to cash in your chips and step away from the table.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/vx6V271x7x0/story01.htm Tyler Durden