What a Disaster This Investment Has Been

By: Chris at http://ift.tt/12YmHT5

When I was younger, 16 I think, I wanted to be George Soros. Horror, I know given that there are probably parts of the world I’d be dismembered in the streets for uttering such a comment. Grumpy old bastard with abhorrent political ideas.

Yes, all true but at the time I wasn’t focused on any of that. I’d read about his shorting the pound – $2 billion in profits with $1B of that in a single day!

I’d just gotten interested in currencies. A strange thing you may think for a 16-year old and you’d be right, but I was living in a country with capital controls and was beginning to think through how I was ever going to “get out”. Tand this led me to investigate how rich people “got out”, which in turn brought me to reading about rich people…enter Soros.

In any event, rightly or wrongly, I viewed Soros as the little guy who bet against the big guy and won. A modern day David and Goliath story. Who couldn’t appreciate that?

Soros made a fortune on an asymmetric trade, but there are others of more recent fame. Let’s see:

  • Andrew Lahde
    • Made 1000% shorting the US subprime market.
  • John Paulson
    • Made $4 billion shorting the US subprime market
  • Kyle Bass
    • Bought Greek CDS and made 70,000%. He also made 600% shorting the sub-prime market and from 2006 to 2009, his fund returned 340% net of all fees and expenses while the S&P 500 has returned -42.3%. The fund’s annual return was a whopping 85% for the 3 year period mentioned.

What I takeaway from this, other than Kyle Bass being an obvious underachiever, is that when a lopsided market turns, fortunes are made.

Now, you’ll notice that the above mentioned trades involved short selling. One reason that short selling occasionally produces such spectacular returns is because typically short selling is a loss-making proposition. Precisely because it all too often produces losses, is exactly why asymmetry builds up allowing for such amazing returns to be garnered when the imbalance is finally corrected.

We’ve mentioned previously where we believe asymmetry lies. In the Japanese Yen, which we discussed here, here and here, and more recently Brad’s shorting of the Renminbi which we detailed here. These are trades which we’ll just keep rolling as part of a broad asset allocation and risk management plan. We believe our ship will come in and we’ll be patient until such a day arrives.

What I’d like to look at today is a sector I think well worth a bit of scrutiny… miners. Oh, what a dirty word!

Before providing you with the basic investment thesis, I’d like to review an article we published entitled, “Buying Bombed out Equities for Outsized Returns”. In it we provided some stats worth reviewing.

Average 3-year nominal returns when buying a down sector (since 1920s):


Down      Avg. Annual Return

60%   =    57%

70%   =    87%

80%   =  172%

90%   =  240%


Average 3-year nominal returns when buying a down industry (since 1920s):


Down     Avg. Annual Return

60%  =   71%

70%  =   96%

80%  =  136%

90%  =  115%


Average 3-year nominal returns when buying a down country (since the 1970s):


Down     Avg. Annual Return

60%  =  107%

70%  =  116%

80%  =  118%

90%  =  156%

Notice that the second column is the average annual net return. Now, average is… well, average. Imagine you put even a little bit of effort into a sector, country or industry.

The beauty of what I’m sharing with you is that if you just focus on the numbers and take all of the emotion out of the equation, it’s no longer about being contrarian or trend following; it’s purely about following a statistical formula. While that is no guarantee that the particular sector, country or industry you’re tracking will perform as indicated above, it does provide a proven process, and we’ve got the data to prove it.

In light of the above I present to you one of the most horrific investments of the last few years (one which we’ve recommended on occasion, ugghhh): gold mining stocks.

The GDXJ ETF is down 87% from its high in late 2010, and the GDX ETF is down 74%. Statistically we could expect a pretty spectacular return going forward. Both seem like they’re still in free fall and I’m not here to pick a bottom., I’m just playing the odds. Nobody and I mean nobody wants to have anything to do with this sector. The odds look decent to me.

Now these are the ETFs of course, and the problem with mining stocks in the ETFs is that most of them are complete garbage and will never make any money. At least not for shareholders.

For this reason we put together this list of mining companies – all selling for less than cash.

I humbly suggest that simply remembering the statistics above and then buying a basket of better performing companies which are selling for less than cash on their balance sheet, will reduce overall portfolio risk, provide potential for outsized returns and should the strategy work out with the sector rebounding, the returns on the stocks here should theoretically outperform the index or ETFs.

Just remember this isn’t a call on gold going through the roof, or anywhere at all. It is merely looking at asymmetric trading opportunities.

Best of luck!

– Chris


“A stock operator has to fight a lot of expensive enemies within himself.” – Jesse Livermore

via Zero Hedge http://ift.tt/1uT4wmh Capitalist Exploits

What The Swiss Gold Referendum Means For Gold Demand

The referendum for the Swiss Gold Initiative is scheduled for November 30th and the propaganda war – between the Swiss National Bank (SNB) and the Swiss Parliament on one side and the Swiss People's Party (SVP) on the other – has begun and we expect it to escalate as the day draws ever nearer. Having already questioned the 'location, location, location' of Switzerland's current gold stash, and examined the initiative in great depth here, JPMorgan notes that not only might the forthcoming Swiss gold referendum stabilize gold prices at a time when Gold ETF demand continues to decline, but warns, it also appears that markets under-appreciate this event.


As JPMorgan explains,

Gold ETF flows continued to bleed losing $4bn or 6% of AUM cumulatively since the end of August.


Gold Miners ETFs, which have held up relative well up until recently also suffered over the past two weeks (Figure 7).


The downtrend in Gold ETF flows represents a headwind for gold in the face of subdued physical demand recently.

The latest data from China Gold Association, reported physical gold demand by Chinese investors of only 185 tonnes in Q3, down from 246 in Q2 and 322 in Q1.

While Chinese physical demand remains subdued

[ZH – a point we note is very much in the eye of the newspaper holder]


Who do you choose to believe?


h/t @sobata416



*  *  *

The forthcoming Swiss gold referendum could stabilize gold prices at a time when Gold ETF demand continues to decline.

It also appears that markets under appreciate this event.


If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year.


This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year.

*  *  *

As Grant Williams noted previously, with the establishment being unable to actively campaign AGAINST the Initiative, all has been quiet for many months; but with the dawning awareness that this little campaign might actually grow some legs, a few members of that establishment have been getting a little antsy…

(Centralbanking.com): …Now, with less than two months until the vote, the central bank is intensifying its communication. It opened a “dossier” on its website yesterday where it will post materials outlining why it “reject[s] the initiative”.


“Monetary policy transactions directly change our balance sheet. Restrictions on the composition of the balance sheet therefore restrict our monetary policy options,” [SNB Vice-chairman Jean-Pierre] Danthine explained.


“A telling example is our decision to implement the exchange rate floor vis-à-vis the euro… with the initiative’s legal limitation in place, we would have been forced during our defence of the minimum exchange rate not only to buy euros but also to buy gold in large quantities.


 “Our defence of the minimum exchange rate would thus have involved huge costs, which would almost certainly have caused foreign exchange markets to doubt our resolve to enforce the rate by all means.”

Sometimes I think these people are completely delusional.

So, let me get this straight: gold is a relic which restricts your ability to do such vital things as… oh, I dunno, promise to print unlimited amounts of your currency in order to peg it to another, failing currency and thereby debase it by 9% in 15 minutes? Or it might mean the market doesn’t have complete faith that you might be completely relied upon to do really smart things like that?


Somebody. Please? Make it stop.

The Swiss establishment has been reliant upon the public’s ignorance in these matters, but now they are up against a formidable opponent in Egon von Greyerz. Not only that, but they can clearly see that, as elsewhere around the world, the public is fast becoming disenchanted with the status quo; and that is potentially very dangerous for these people.

What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY — not in two years, as many blogs and websites are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you.

The closer we get to the vote on November 30, the bigger this story is going to become, and the bigger it becomes, the higher the chance that the yes vote wins.

Should that happen, it will undoubtedly set off alarm bells throughout the gold market, as yet more physical gold will need to be repatriated and another sizeable, price-insensitive buyer will enter the marketplace.

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

VID: Reason Remembers the Victims of Communism on Berlin Wall Anniversary

“Remembering the Victims of Communism,” produced by Meredith
Bragg and Michael C. Moynihan. About 4 minutes. Original release
date was November 9, 2009 and original writeup is below.

Twenty years ago today, the Berlin Wall was breached and
Soviet communism, at long last, entered its death

After claiming approximately 100 million victims in the 20th
century, communism was dismissed to the ash heap of history. But
those who suffered under its boot heel have largely been confined
to the history books when not forgotten altogether.

Author and historian Lee Edwards set out to correct this
oversight with the creation of the Victims of Communism memorial
and online museum, dedicated to those who perished because of
Communist regimes between 1917 and

Reason.tv spoke to Edwards about the importance of historical
memory, plans for a forthcoming bricks-and-mortar museum in
Washington, DC, and the paintings of Ukrainian gulag survivor
Nikolai Gettman, currently on display at the Heritage Foundation,
where Edwards is a “Distinguished Fellow in Conservative

Produced by Meredith Bragg and Michael C. Moynihan.

 Interview by Moynihan. Shot and edited by Bragg.
Approximately 4 minutes.

from Hit & Run http://ift.tt/1uSVy8s

A “Magical Fairyland” – How Global Multi-National Corporations Avoid Taxes In Luxembourg

Submitted by Michael Krieger via Liberty Blitzkrieg blog,

“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ said Stephen E. Shay, a professor of international taxation at Harvard Law School and a former tax official in the U.S. Treasury Department. The Grand Duchy, he said, “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”


The deals can be so complex that PwC accountants frequently include “before” and “after” diagrams to illustrate how money flows from subsidiary to subsidiary and across different countries and tax havens. The leaked records show that Luxembourg’s 2009 tax deal for Illinois-based Abbott Laboratories – which makes arthritis drugs and Ensure meal replacement shakes –features 79 steps including companies in Cyprus and Gibraltar. Abbott projected it would invest as much as $50 billion via Luxembourg.


More than 170 of the Fortune 500 companies have a Luxembourg branch, according to Citizens for Tax Justice, a nonprofit research and advocacy group. A total of $95 billion in profits from American corporations’ overseas operations flowed through Luxembourg in 2012, the most current statistics from the U.S. Bureau of Economic Analysis show. On those profits, corporations paid $1.04 billion in taxes to Luxembourg – just 1.1 percent.


– From the ICIJ’s report: Leaked Documents Expose Global Companies’ Secret Tax Deals in Luxembourg

The following expose by the International Consortium of Investigative Journalists (ICIJ), at times reads like a movie script. Leaked documents, one of the world’s largest accounting firms, and a retired tax official named Marius Kohl, nicknamed “Monsieur Ruling,” who was described by a Belgian newspaper as “the guardian of the only door through which companies can enter the fiscal paradise of Luxembourg.  This piece has it all.

Here are some choice excerpts:

Pepsi, IKEA, FedEx and 340 other international companies have secured secret deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny European duchy, leaked documents show.

These companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, according to a review of nearly 28,000 pages of confidential documents conducted by the International Consortium of Investigative Journalists and a team of more than 80 journalists from 26 countries.


Big companies can book big tax savings by creating complicated accounting and legal structures that move profits to low-tax Luxembourg from higher-tax countries where they’re headquartered or do lots of business. In some instances, the leaked records indicate, companies have enjoyed effective tax rates of less than 1 percent on the profits they’ve shuffled into Luxembourg.


The leaked documents reviewed by ICIJ journalists include hundreds of private tax rulings – sometimes known as “comfort letters” – that Luxembourg provides to corporations seeking favorable tax treatment.


The leaked documents reviewed by ICIJ involve deals negotiated by PricewaterhouseCoopers, one of the world’s largest accounting firms, on behalf of hundreds of corporate clients. To qualify the companies for tax relief, the records show, PwC tax advisers helped come up with financial strategies that feature loans among sister companies and other moves designed to shift profits from one part of a corporation to another to reduce or eliminate taxable income.


The records show, for example, that Memphis-based FedEx Corp. set up two Luxembourg affiliates to shuffle earnings from its Mexican, French and Brazilian operations to FedEx affiliates in Hong Kong. Profits moved from Mexico to Luxembourg largely as tax-free dividends. Luxembourg agreed to tax only one quarter of 1 percent of FedEx’s non-dividend income flowing through this arrangement – leaving the remaining 99.75 percent tax-free.


“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ said Stephen E. Shay, a professor of international taxation at Harvard Law School and a former tax official in the U.S. Treasury Department. The Grand Duchy, he said, “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”


FedEx declined comment on the specifics of its Luxembourg tax arrangements. Other companies seeking tax deals from Luxembourg come from private equity, real estate, banking, manufacturing, pharmaceuticals and other industries, the leaked files show. They include Accenture, Abbott Laboratories, American International Group (AIG), Amazon, Blackstone, Deutsche Bank, the Coach handbag empire, H.J. Heinz, JP Morgan Chase, Burberry, Procter & Gamble, the Carlyle Group and the Abu Dhabi Investment Authority.


Disclosure of the leaked documents comes at a sensitive time for Luxembourg, a nation with a population of less than 550,000. Amid the EU probe of Luxembourg’s tax deals, former Luxembourg Prime Minister Jean-Claude Juncker is in his first week in office as president of the European Commission, one of the most powerful positions in the EU.

So our old friend Jean-Claude Juncker has reared his crony head. He’s the central planner who famously said: “when it becomes serious, you have to lie.” This is all starting to make perfect sense now…

Juncker, Luxembourg’s top leader when many of the jurisdiction’s tax breaks were crafted, has promised to crack down on tax dodging in his new post, but he has also said he believes his own country’s tax regime is in “full accordance” with European law. Under Luxembourg’s system, tax advisers from PwC and other firms can present proposals for corporate structures and transactions designed to create tax savings and then get written assurance that their plan will be viewed favorably by the duchy’s Ministry of Finance.


PwC said ICIJ’s reporting is based on “outdated” and “stolen” information, “the theft of which is in the hands of the relevant authorities.” It said its tax advice and assistance are “given in accordance with applicable local, European and international tax laws and agreements and is guided by a PwC Global Tax Code of Conduct.”

I’m certain the “code of conduct” is about as robust as Goldman’s “conflict of interest policy.”

U.S. and U.K. companies appeared more frequently in the leaked files than companies from any other country, followed by firms from Germany, Netherlands and Switzerland. Most of the rulings in the stash of documents were approved between 2008 and 2010. Some of them were first reported on in 2012 by Edouard Perrin for France 2 public television and by the BBC, but most of the PwC documents have never before been analyzed by reporters.


The files do not include tax deals sought from Luxembourg authorities through other accounting firms. And many of the documents do not include explicit figures for how much money the companies expected to shift through Luxembourg.


Experts who’ve reviewed the files for ICIJ say the documents do make it clear, though, that the companies and their advisors at PwC engaged in aggressive tax-reduction strategies, using Luxembourg in combination with other tax havens such as Gibraltar, Delaware and Ireland.

Yes, Ireland. If you recall, I highlighted the tax avoidance strategy known as the “Double Irish” last year in the post: Shocker! Multinational Corporations Don’t Pay Taxes.

The Pepsi Bottling Group Inc., a New York-based unit of PepsiCo, used subsidiaries in Luxembourg to arrange a series of loans among sister companies that allowed the bottler to reduce its tax rate on its $1.4 billion purchase of a controlling interest in JSC Lebedyansky, Russia’s largest juice maker. At least $750 million of the money involved in the Russian deal traveled through a Luxembourg subsidiary named Tanglewood, before landing in a Pepsi subsidiary in Bermuda. Luxembourg acted as a tax-reducing conduit as the profits moved from Russia to Bermuda.


New York-based Coach Inc. set up two Luxembourg entities to move €250 million in Hong Kong earnings in 2011, an amount it expected to approach €1 billion by 2013. One Luxembourg entity acted as an internal corporate bank, allowing much of the luxury goods maker’s Asian operating earnings to glide through a series of foreign entities in the form of interest payments on money the company loaned itself. Filings in Luxembourg showed that in 2012, the company paid €250,000 in taxes on €36.7 million in earnings channeled into Luxembourg – a rate of well under 1 percent.


“This is the first time really that we’ve seen inside the workings of Luxembourg as a tax haven,” said Richard Brooks, a former U.K. tax inspector and author of the book The Great Tax Robbery, who was hired by ICIJ to help review some of the leaked documents. “The countries . . . that are losing money, they don’t know about it, don’t know how it operates at all.”


More than 170 of the Fortune 500 companies have a Luxembourg branch, according to Citizens for Tax Justice, a nonprofit research and advocacy group. A total of $95 billion in profits from American corporations’ overseas operations flowed through Luxembourg in 2012, the most current statistics from the U.S. Bureau of Economic Analysis show. On those profits, corporations paid $1.04 billion in taxes to Luxembourg – just 1.1 percent.


Other tax havens, Ireland for example, openly advertise rock-bottom corporate tax rates of 12.5 percent. Luxembourg instead maintains a statutory tax rate of 29 percent, but the leaked files show that the duchy has routinely approved tax rulings that whittle down what counts as taxable income to practically nothing. This can drop Luxembourg’s effective tax rate deep into single digits.


The deals can be so complex that PwC accountants frequently include “before” and “after” diagrams to illustrate how money flows from subsidiary to subsidiary and across different countries and tax havens. The leaked records show that Luxembourg’s 2009 tax deal for Illinois-based Abbott Laboratories – which makes arthritis drugs and Ensure meal replacement shakes –features 79 steps including companies in Cyprus and Gibraltar. Abbott projected it would invest as much as $50 billion via Luxembourg.


In a 2009 presentation, PwC highlights Luxembourg as a place with “flexible and welcoming authorities” who are “easily contactable” and offer a “readiness for dialogue and quick decision-making process.”


Most of the leaked tax rulings were approved and signed by the same tax official, Marius Kohl, now retired. Sometimes known in tax circles as “Monsieur Ruling,” Kohl was described by one Belgian newspaper as “the guardian of the only door through which companies can enter the fiscal paradise of Luxembourg. During his time as head of a Luxembourg agency called Sociétés 6, Kohl oversaw the approval of thousands of tax agreements, personally signing as many as 39 in the course of a single day. The Wall Street Journal has reported that since Kohl retired in 2013, it can take up to six months for a tax ruling to be approved.


Corporations that have established toeholds in Luxembourg have made use of financial instruments that shift money around the map to play one country’s tax rules against another. This might be, for instance, a hybrid debt instrument that allows profits to move out of a high-tax EU country to a Luxembourg entity. The profits are treated as interest payments in Luxembourg, where they can be deducted from taxes. In the parent company’s country, they can be treated as dividends and eligible for a tax exemption.


These companies can represent big bucks. From the U.S. alone, direct investment into Luxembourg in 2013 was $416 billion, according to the U.S. Bureau of Economic Analysis. Of that, the vast majority, $343 billion, was in the form of holding companies, which are vehicles to hold securities and financial assets rather than to create local jobs.


Reuters reported in 2012 that Amazon’s Luxembourg arrangements allowed it to have an average tax rate of 5.3 percent on overseas income from 2007 to 2011. Amazon company filings show that in 2013 the on-line merchant reported revenues of $20 billion from its European operations, which are channeled primarily through Luxembourg.

With all this tax avoidance, you’d think Amazon would be able to post higher profits.

Adding a political twist to the Brussels probes is Juncker’s rise to the presidency of the European Commission. As Luxembourg’s prime minister, he signed into law the provision that allows companies to write off 80 percent of royalty income from intellectual property.

Glad to see Juncker’s doing so well. It makes sense, in a global economy run by thieves, lying certainly pays off.

Look, I’m not a big fan of taxes to begin with, particularly not within the current system in which there is so much waste and fraud in government. The big point here is this situation once again highlights the stark difference with how the rich and powerful are treated within society and the average person. While the IRS looks to tax complimentary employee lunches and targets organizations based on their political views, multi-nationals with billions of earnings barely pay a dime. Just another example of the neo-feudal vice clamping down on the planet.

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

Video: Berliners Mark 25 Years Since Fall of the Berlin Wall

“Berliners Mark 25 Years Since Fall of the Berlin Wall” is the
latest video from Reason TV. Watch above or click on the link below
for video, full text, supporting links, downloadable versions, and
more Reason TV clips.

View this article.

from Hit & Run http://ift.tt/1ynd6qc

This Is What Happens When Trying To Get To The Bottom Of The UBS Gold-Rigging Scandal

As reported previously, and as had been suspected for years, the gold manipulation cartel is slowly breaking apart, and courtesy of the FT, we now know at least one individual directly implicated in Swiss gold-rigging: the former head of UBS’s gold desk in Zurich, André Flotron.

So as part of our diligence, because apparently no other media will touch the topic of gold rigging until and unless it is shoved in their face on a silver platter, after all it is too “conspiratorial”, we decided to ask Mr. Flotron some on the record question, and sent him the following email:

Andre, we are following up on the FT’s gold rigging story and were wondering if we could ask you a few follow up questions on the record?

This is the response we got:

From: <andre.flotron@ubs.com>


Date: 9 November 2014 17:47:12 WET


Subject: Out of Office AutoReply:


Dear sender,


I am no longer responsible for your inquiry. Please refer to Roger Böhler (roger.boehler@ubs.com)

Best regards,


André Flotron


Based on the present E-Mail exchange, and/or on the agreement reached with you, respectively, UBS is entitled to contact you via insecure E-Mail:(a) E-Mails contain substantial risks such as lack of confidentiality, manipulation of content and sender, misdirection, viruses etc. UBS does not accept any liability for damages arising from use of E-mail. Accordingly, UBS recommends to abstain from sending any sensitive information via E-Mail, from forwarding the text received  when submitting reply E-Mails and recommends to manually capture the  E-Mail address in every instance. If you should wish to verify the content of this message, please request a hard-copy version. (b) In principle, UBS does not accept any (purchase) orders,  cancellation of orders or authorizations etc. via E-mail. If UBS  receives such E-Mails, UBS is not obliged to expressly decline them. If you have received this E-Mail by mistake or do not wish to be contacted by E-Mail in the future, you are kindly asked to inform UBS accordingly. Any E-Mail received by mistake (including all its annexes) needs to be destroyed and the content may not be forwarded nor disclosed to any further persons. c) This message is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any securities or  related financial instruments.


UBS reserves the right to retain all messages. Messages are protected and accessed only in legally justified cases.

To be expected. After all, we know that having been the first person busted for gold rigging in Switzerland, Andre is gone but “keen to return in due time.


So we did as he requested, and sent an identical email to person he named as responsible “for our inquiry”, Roger Böhler.

To our surprise, Roger also appears to no longer be at the company. To wit:

This is the mail system at host dmz-smtpgate1.stm.ibb.ubs.com.


I’m sorry to have to inform you that your message could not be delivered to one or more recipients. It’s attached below.


For further assistance, please send mail to postmaster.


If you do so, please include this problem report. You can delete your own text from the attached returned message.


The mail system <roger.boehler@ubs.com>: host sstm8336pmh.stm.swissbank.com[] said: 550 5.1.1 <roger.boehler@ubs.com>: Recipient address rejected: User unknown in local recipient table (in reply to RCPT TO command)

Which, in retrospect, should not have been a surprise. It was on July 13, 2014 when the FT reported that:

Roger Böhler, chief dealer at UBS in Connecticut, has been the latest senior trader to leave his employer in recent weeks, people close to the situation said. The reasons for his departure are not known. Mr Böhler could not be reached for comment while UBS declined to comment.

The reasons for his departure are now known. What is unclear, however, is why Flotron, who is on leave with UBS as of January for reasons known, had an autoforward as recently as today suggesting inquiries be addressed to a person who no longer is with UBS.

In other words, good luck trying to get to the bottom of the UBS gold-rigging scandal, where every loose end is now also a dead end.

Perhaps the biggest surprise is that the “suicide epidemic”, recently prevalent among various senior executives at Germany’s largest bank, Deutsche Bank, hasn’t spread to the largest bank in Switzerland headquartered at Bahnhofstrasse 45, Zurich. At least not yet.

via Zero Hedge http://ift.tt/1GFg7II Tyler Durden

Isn’t It Time We Turned American Democracy Over To The Experts?

Even before the big loss for the Democrats, we had all lost. The money pouring into politics from Super PACs and shady political “nonprofit” organizations was stealing Democracy from you and me. Financial contributions from individual voters is being eclipsed by the big bucks pouring in from far fewer big-money sources.

“Isn’t it time to hand democracy over to the experts? Send the voters packing!!”


Source: Mark Fiore

via Zero Hedge http://ift.tt/1w67wX5 Tyler Durden


Friday gave us a rare glimpse inside one of the Bureau of Labor Statistics Jobs Centers (courtesy of CNBC)… Perhaps, as the following screengrab indicates, this is why the American unemployed’s “re-training” is not preparing them for life in the new economy?


In the new normal, the ubiquitous BSOD is officially to be renamed the BLSOD…


How much did the Obamacare website cost again?

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

Peak Cheap Oil

Submitted by Adam Taggart via Peak Prosperity,

Energy is the lifeblood of any economy.  But when an economy is based on an exponential debt-based money system and that is based on exponentially increasing energy supplies, the supply of that energy therefore deserves our very highest attention.

But we need to be careful here because it’s a mistake to lump all types of energy together because they have very different uses in our economy and they are not interchangeable.

What we’re going to examine in this chapter on Peak Cheap Oil is transportation fuels.  The liquids we put in our trucks and cars and airplanes.  Why?

Because 95% of everything that moves from point A to point B across the globe does so based on petroleum derived liquid fuels.  This makes petroleum quite special and unique.

And despite vastly increasing the global spend on oil operations, despite the shale oil "miracle" so loudly touted by the press — global production remains nearly unchanged. In just a few short years, it’s now costing us double to extract roughly the same amount of oil out of the ground.

What’s clearly at work here is that we’re finding more oil, but it’s expensive. Yet total global demand for oil will climb as developing countries expand their economies and world population continues to grow. Competition for hydrocarbons will become more fierce than it has ever been.

I’m soft-pedaling this to an enormous degree.  Let me be blunt.  If we are already at peak, as the data suggest is possible, then we are all in trouble.


For those who simply don't want to wait until the end of the year to view the entire new series, you can indulge your binge-watching craving by enrolling to PeakProsperity.com. The entire full new series, all 27 chapters of it, is available — now– to our enrolled users.

The full suite of chapters in this new Crash Course series can be found at http://ift.tt/VLldvm

And for those who have yet to view it, be sure to watch the 'Accelerated' Crash Course — the under-1-hour condensation of the new 4.5-hour series. It's a great vehicle for introducing new eyes to this material.

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

The Democrats Got Crushed in the Midterms. But “the Republican Brand [Still] Sucks.” Here’s What’s Next.

It’s always easy to confuse the most-recent
election as they most important and a bellwether for the next big
thing in politics. And there’s no question the the GOP has a ton of
momentum after winning a majority in the Senate and making gains in
the House of Representatives and state houses and legislatures
around the country.

But the long-term trends strongly suggest that this recent
uptick in the GOP’s favor is only a temporary reprieve in the long,
slow decline of both parties. Voter identification with both
Democrats and Republicans is way down from a few decades ago and
political independents are on the rise. That’s especially true
among voters below the age of 30. What’s going on?

The short version is that political, cultural, and even economic
power has been decentralizing and unraveling for a long time.
Whether you like it or not, The
Libertarian Moment
 is here, a technologically driven
individualization of experience and a breakdown of the large
institutions—governments, corporations, churches, you name it—that
used to govern and structure our lives. The result is that top-down
systems, whether public or private, right wing or left wing, have
less and less ability to organize our lives. That’s true whether
you’re talking about the workplace, the bedroom, or the bar down
the street (that may now be serving legal pot). This is mostly
good, though it’s also profoundly disruptive too. 

That’s from my Daily Beast column. For all sorts of
reasons, we’ll always have two major parties in America, but what
they stand for can and does change on a regular basis. Neither
party enjoys anything close to majority (or even plurality) support
from most Americans. They’re going to have change their frameworks
and fast if they want to flourish.

In a world where you can personalize and individualize your
online experience, your clothing, your work situation, even your
sexuality, why would anyone join up for ossified, rigid,
centuries-old groups such as the Democrats or Republicans?
Repulican brand sucks
,” Sen. Rand Paul of Kentucky said
recently of his own party, which he compared to Domino’s Pizza. If
the Republicans are Domino’s, then the Democrats are Pizza Hut.
Neither is appealing in a world of easy-to-find gourmet fare.

And that’s why the future of politics and
policy doesn’t belong to doctrinaire Democrats or Republicans who
want to control large swaths of everyday life. It belongs
ultimately to the libertarian decentralists such as Paul who not
only understand what is happening to America but are growing
comfortable with it. Americans are increasingly wary
of government’s
, and they don’t want it to teach a single set of morals
either. Everything is proliferating and people
just want a government that will keep people from starving on the
streets and get out of the way as they go to the corner pot shop to
buy edibles to take to their friends’ gay wedding celebrated by
ministers who are not forced to do so.

Politicians and parties who champion policies that embrace
economic and social decentralization will own the future, even as
they wield less power by letting people discover how they actually
want to live. Whoever wins tonight would do well to remember that.
Because if they don’t, they’ll be losers again, and sooner than you

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