Tag: finance

Submitted by Wulf via One Easy Trade blog,

In late 1992, just as the Fed was putting the finishing touches on a three-year easing cycle that took the Fed funds rate from 9.75% down to 3%, the 2s/5s Treasury curve peaked at a high of 160 basis points. In the summer of 2003, when the Fed completed another large easing cycle, this one taking the funds rate from 6.5% to 1% over 30 months, the 2s/5s curve peaked at 161 basis points. And in March, 2010, as the Fed made the final purchases of its first quantitative easing program after cutting rates to the zero bound 15 months prior, the 2s/5s curve peaked at 162 basis points.

Today, with the Fed once again in the late stages of an easing cycle (affectionately dubbed QE3), we find the 2s/5s curve steepening yet again, hitting its widest level in 30 months at more than 135 basis points on January 1. Given this curve’s uncanny track record, one can’t help but wonder if it will ring the 160 bell yet again when the Fed completes its final purchase operation of QE3. With tapering now upon us, and the end of QE3 almost in sight, one might even be tempted to sell a few 5s against twos in the hopes of catching that final 25 basis points of steepening.

A closer examination of that trade, however, reveals that one might be better off doing just the opposite.

First let’s consider the timing: At the December 18^th FOMC meeting, the Fed announced a $10bn reduction in monthly asset purchases, and if it continues to reduce asset purchases at that pace going forward, it should be done by the end of the year. If, however, improving economic data compel them to reduce asset purchases at an accelerated rate of, say, $15 billion at each subsequent meeting, they could be done as soon as September. This would be the more aggressive timeline and the best-case scenario for a 2s/5s steepener.

Running a simple horizon analysis of a duration neutral 2s/5s expression using current on-the-runs Treasuries, and assuming a 131 basis point spread at entry and a 160 basis point spread at exit on the September 17 FOMC meeting date shows that the spread widening would net you almost exactly one point in capital gains as the 5yr sells off, but would cost you almost as much in negative carry, leaving you no better than if you had simply bought 2s outright and clipped the coupon for nine months.

And if the Fed instead takes a bit longer to wind down its easing campaign, or puts the taper on hold in response to softer inflation data or some unforeseen shock, you’ll want to be long the 5-year point, not short.

Moreover, since the fed funds rate is likely to remain pinned to the floor for a “considerable time after the asset purchase program ends”, the front end of the Treasury curve is likely to stay fairly well anchored for quite some time as well. This may then also place a soft cap on 5-year yields, which one can expect to rise no more than 160 basis points over 2s. So if 2s trade up to, say 60 bps (already higher than they’ve been in years) and 2s/5s reach their 160 basis point peak, you’re looking at a 2.20% 5yr yield, up 45 basis points from current levels. As long as the front end doesn’t come completely unhinged, you now know your likely downside for the next 9 months or so, and your carry is still about as good as it’s been in years.

Investors find great comfort in being able to quantify their downside, and they also like positive carry in a low-yield environment. As such, I would have to think that 5s are getting close to a strategic buy, and I would use any backup towards 2% (or 160 over 2s) to get long.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BDay-F5mcdg/story01.htm Tyler Durden

Perhaps the most amusing and curious aspect of this entertaining summary of the Mississippi Bubble of 1720, the resulting European debt crisis (the first of many), how bubble frenzies are as old as paper money, the man behind both – convicted murderer and millionaire gambler, John Law, what happens when paper money’s linkage to gold is broken, and how everyone loses their wealth and hyperinflation breaks out, is who the source is. The New York Fed. Perhaps the Fed-employed authors fail to grasp just what their institution does, or have a truly demonic sense of humor. In either case, the following “crisis chronicle” highlighting how banking worked then, how it works now, and how it will always “work”, is a must read by all.

Crisis Chronicles: The Mississippi Bubble of 1720 and the European Debt Crisis

Convicted murderer and millionaire gambler John Law spotted an opportunity to leverage paper money and credit to finance trade. He first proposed the concept in Scotland in 1705, where it was rejected. But by 1716, Law had found a new audience for his ideas in France, where he proposed to the Duke of Orleans his plan to establish a state bank, at his own expense, that would issue paper money redeemable at face value in gold and silver. At the time, Law’s Banque Generale was one of only six such banks to have issued paper money, joining Sweden, England, Holland, Venice, and Genoa. Things didn’t turn out exactly as Law had hoped, and in this edition of Crisis Chronicles we meet the South Sea’s lesser-known cousin, the Mississippi Bubble.

Who Wants to Be a Millionaire?

John Law was an interesting figure with a colorful past. He was convicted of murder in London but, with the help of friends, escaped to the continent, where he became a millionaire through his skill at gambling. Like South Sea Company Director John Blunt in England, Law believed that a trading company could be leveraged to exchange the monopoly rights of trade for the ability to make low-interest-rate loans to the government. And like Blunt, in 1719 Law formed a trading company—the Mississippi Company—to exploit trade in the Louisiana territory. But unlike Blunt or the South Sea Company, the Mississippi Company made an earnest effort to grow trade with the Louisiana territory.

In 1719, the French government allowed Law to issue 50,000 new shares in the Mississippi Company at 500 livres with just 75 livres down and the rest due in nineteen additional monthly payments of 25 livres each. The share price rose to 1,000 livres before the second installment was even due, and ordinary citizens flocked to Paris to participate. Based on this success, Law offered to pay off the national debt of 1.5 billion livres by issuing an additional 300,000 shares at 500 livres paid in ten monthly installments.

Law also purchased the right to collect taxes for 52 million livres and sought to replace various taxes with a single tax. The tax scheme was a boon to efficiency, and the price of some products fell by a third. The stock price increases and the tax efficiency gains spurred foreigners to Paris to buy stock in the Mississippi Company.

By mid-1719, the Mississippi Company had issued more than 600,000 shares and the par value of the company stood at 300 million livres. That summer, the share price skyrocketed from 1,000 to 5,000 livres and it continued to rise through year-end, ultimately reaching dizzying heights of 15,000 livres per share. The word millionaire was first used, and in January 1720 Law was appointed Controller General.

The Trickle Becomes a Flood

Reminiscent of a handful of florists failing to reinvest in tulip bulbs as we described in a previous post on Tulip Mania, in early 1720 some depositors at Banque Generale began to exchange Mississippi Company shares for gold coin. In response, Law passed edicts in early 1720 to limit the use of coin. Around the same time, to help support the Mississippi Company share price, Law agreed to buy back Mississippi Company stock with banknotes at a premium to market price and, to his surprise, more shareholders than anticipated queued up to do so—a surprise we’ll see repeated at the apex of the Panic of 1907. To support the stock redemptions, Law needed to print more money and broke the link to gold, which quickly led to hyperinflation, as we saw in our post on the Kipper und Wipperzeit.

The spillover to the economy was immediate and most notable in food prices. By May 21, Law was forced to deflate the value of banknotes and cut the stock price. As the public rushed to convert banknotes to coin, Law was forced to close Banque Generale for ten days, then limit the transaction size once the bank reopened. But the queues grew longer, the Mississippi Company stock price continued to fall, and food prices soared by as much as 60 percent.

To make matters worse, there was an outbreak of the plague in September 1720, which further restricted economic activity—in particular, trade with the rest of Europe. By the end of 1720, Law was dismissed as Controller General and he ultimately fled France.

Balancing Dispersed Debt Issuance against Central Monetary Policy

One might argue that Law suffered a self-inflicted loss of control over monetary policy once the link between paper money issuance and the underlying value of gold holdings was broken—a lesson that monetary authorities have learned over time. (ZH: they have? where?)  But what if you don’t have direct sovereign authority over banknote issuance or, in more modern times, monetary policy? A challenge that’s perhaps most visible in the Eurozone is how best to balance dispersed, country-specific debt issuance against more centralized authority over monetary policy. In an upcoming post on the Continental Currency Crisis, we’ll see why a united fiscal policy was needed along with the united currency and monetary policies. Could the same be true of Europe? And if so, would a united fiscal policy include Eurozone debt as well as centralized fiscal transfers, or perhaps even collection of taxes? Tell us what you think.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6uTWHC3tWiI/story01.htm Tyler Durden

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/FBscNmp2cXc/story01.htm williambanzai7

Submitted by Gonzalo Lira via Gonzalo Lira's blog,

People often criticize me for objecting to the Federal Reserve’s Quantitative Easing (QE) and Zero Interest-Rate Policy (ZIRP) on the grounds that they are setting the stage for hyperinflation and a dollar collapse. Since neither has arrived – yet – people mock me, often pretty badly: “Hey Lira! How's that 2% ‘hyperinflation’ working out for ya!”

But even if you don’t buy that QE and ZIRP will lead to a dollar collapse, you do have to admit that these Fed policies have severely brainwashed investors.

Why ‘brainwashed’? Because today, due to the Fed’s policies, stock prices are booming—we’re about to crack 16,500 on the Dow Jones, NASDAQ is well on its way to 4,200, and the S&P is close to 1,850—all record highs.

What’s wrong with record highs? What’s wrong with booming stock prices? Absolutely nothing—unless you look at the two-year charts and realize that these three indices are not reflecting a robust, booming economy. Rather, they have had unrelenting climbs that have been openly—and exclusively—caused by QE and ZIRP.

Which has brainwashed investors into dismissing value. Today, all investors are momentum-chasing pump-and-dumpers who are not worrying about fundamentals, or worrying about the long-term health and well-being of a company.

All they have been brainwashed into caring about is the rise in a stock’s price.

Which is pretty funny, if you think about it: These investors might shun penny-stocks, they might buy and sell stocks by way of “respectable” brokerage houses—but these investors are behaving exactly like the suckers taken for a ride by sketchy boiler rooms operating out of north Jersey.

And we all know how those poor saps usually end up: Broke, holding on to worthless stock certificates not worth the paper they’re printed on.

Why is this happening? Easy, because of the Fed’s QE and ZIRP have so flattened the yield curve across Treasuries and the rest of the bond markets, that anything yielding better than 5%—in any asset class, not just bonds—quickly gets priced up.

They call Treasuries the “benchmark” for a reason: As the (supposedly) safest asset class, they set the yield curve for all assets in all classes—not just in other bonds, but in equities and real estate as well. If Treasury yields are minimal, then a “normal” yield in a riskier asset class will also be minimal.

Look at the following chart:

These are the Top 20 Dow Jones stock as measured by expected stock dividend yields for 2014. The mean of these Top 20 is 3.16%, the average 3.28%.

Now, these are the bluest of the blue-chips—repeat, the Top 20 as measures by yield. If you get dividends of 3.28% on these blue-chip stocks, and pay an income tax rate of say 35% combined State and Federal, you’re looking at a yield of 2.13%.

That’s yearly. That’s less than inflation.

So why are the yields on these oh-so-blue-chips so low? Because of QE and ZIRP’s unrelenting asset price inflation. That’s why you have companies like twitter—which does not have any income to speak of—with a market valuation of $38 billion or whatever.

Since nothing yields a healthy 6% or better, the only thing investors care about today is whether the price of the asset they “invest in” will rise within the year—so that they can sell it at a profit.

That’s not investing—that’s speculating.

By the way, unrelenting asset price inflation was the whole point of the Federal Reserve’s policies. Yeah, I know I went overboard with the combined bold-italics-underlined thing, but I just wanted to emphasize that point, and one other:

The Federal Reserve is the boiler room operation that has pumped up the equities market by way of QE and ZIRP. You are investing in a pump-and-dump scam. And like in all such scams, you will lose.

Clear enough for ya?

Crazy as this may sound, when you look at those measely yields for the Top 20 performer, you realize that investors for the time being are acting rationally: Since yields are minimal—in fact negative, after you factor in income tax and inflation—it pays investors to speculate, rather than to properly invest. Not only are the Fed’s policies goosing the equities markets, the tax code privileges speculators as well, by way of a capital gains tax rate which is lower than the income tax rate. You pay less taxes if you speculate than if you invest responsibly. (!)

Thus both the Federal Reserve and the IRS are encouraging speculation. That’s how investors have become brainwashed: They think that this low-yield, high-asset price inflation, low-capital gains tax environment is the way things ought to be.

But even though the Fed is deliberately, openly goosing the market, no different from a Jersey boiler room operation, nobody’s complaining—or even realizing it—because at this time, investors are making money with this Global Pump-and-Dump.

It ought to be beautiful, right? Everybody making money, all happy in the world. Only problem is, these pump-and-dum scams always end. When do they end? When people stop believing in the hype. When people realize that the global economy is in the toilet, companies are not booming but barely getting by, and there’s nothing on the horizon which will restart the economy. When people—and not a lot of people, mind you, just a tipping point estimated at about 10%—realize that this game that the Fed is playing with QE and ZIRP is a game of musical chairs.

That’s when the Fed’s Global Pump-and-Dump Scam will blow up.

You don’t think as I do that QE and ZIRP will lead to hyperinflation and dollar collapse? Fine, that’s cool—but admit that these Fed policies are skewing the market: They are turning investors into speculators—scratch that, brainwashing them into gamblers.

And it will all end in tears—these schemes usually do. I for one am keeping an ear on this game of musical chairs, trying to anticipate when the music will stop.

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

While BofAML's Macneil Curry remains a longer-term Treasury bear, in the near-term (and potentially medium-term) the evidence for a pause and corrective yield pull-back is too much to ignore. Given the momentum conditions, he notes, these levels are not going to give way without a fight – Treasur bears beware. He also fears a correction lower in EURUSD and USDJPY (JPY strength) but worries that gold has further to fall.

 

Via BofAML's Macneil Curry,

US 5s & 30s at MASSIVE, LONG TERM SUPPORT. Bears beware

We are long term Treasury bears, with 5s targeting the Feb’11 highs at 2.42%, 10s targeting 3.45%/3.50% and 30s targeting 4.23%/4.25%.

However, in the near term (and potentially medium term) the evidence for a pause and corrective yield pullback is too difficult to ignore. While momentum has not confirmed this most recent yield advance from the Oct lows, it is the SIGNIFICANT LONG TERM SUPPORT LEVELS, particularly in 5s and 30s, that have our attention. Indeed, 5s are right on 4.5yr trendline/channel support at 1.756%/1.775%, while 30s are just shy of 20 year channel support and the 100m average at 4.05%. Indeed, monthly momentum in 30s has reached oversold for the 1st time since 2000.

Given the momentum conditions, THESE LEVELS ARE NOT GOING TO GIVE WAY WITHOUT A FIGHT. TREASURY BEARS BEWARE.

Key resistance for each point on the curve is varied. For 5s, a correction could come in the form of a 1.775%/1.659% range, but if 1.659% goes, we risk a 11bp decline. In 10s, stops are likely below 2.935%, through which confirms a top and turn lower to 2.88% and below, while in The Bond bulls need a break of 3.762% to confirm a top, exposing a push to 3.563%/3.461%.

Turning to the curve (5s30s) we hold a near term neutral bias within the 230.9bps/204.9bps, preferring to fade the range extremes. However, on a long term basis, the trend is for FLATTENING, with a break of 205bps/195.1bps opening retracement support at 146bps and below.

€/$ in trouble, but $/¥ is at risk as well.

Ahead of event risk, evidence continues to build for a lower €/$. A daily close below 1.3581/1.3548 (6m trendline & 100d average) confirms a turn lower, exposing the 200d (now 1.3335) and below.

Meanwhile, we remain very cautious on $/¥, as the 3m uptrend is increasingly vulnerable to a top and reversal. The bearish daily momentum divergences and completing 5 wave advance from both Feb’12 and Oct’13 says that additional strength is limited before a top and turn.

Given the strong correlation between $/¥ and US 10yr yields; a break down in yields could be the catalyst for such a reversal. 103.74 (May’13 high) is key support. A sustained break below confirms the turn, exposing the 200d at 99.70 and likely below.

Gold remains in trouble

Despite the rally in the US $, gold has proven to be very resilient. However, stay bearish against 1251/1270. Against here, the downtrend remains on firm footing for a test and break of the Jun lows at 1180, opening LONG-TERM PIVOTAL SUPPORT BETWEEN 1127/1087

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

While BofAML's Macneil Curry remains a longer-term Treasury bear, in the near-term (and potentially medium-term) the evidence for a pause and corrective yield pull-back is too much to ignore. Given the momentum conditions, he notes, these levels are not going to give way without a fight – Treasur bears beware. He also fears a correction lower in EURUSD and USDJPY (JPY strength) but worries that gold has further to fall.

 

Via BofAML's Macneil Curry,

US 5s & 30s at MASSIVE, LONG TERM SUPPORT. Bears beware

We are long term Treasury bears, with 5s targeting the Feb’11 highs at 2.42%, 10s targeting 3.45%/3.50% and 30s targeting 4.23%/4.25%.

However, in the near term (and potentially medium term) the evidence for a pause and corrective yield pullback is too difficult to ignore. While momentum has not confirmed this most recent yield advance from the Oct lows, it is the SIGNIFICANT LONG TERM SUPPORT LEVELS, particularly in 5s and 30s, that have our attention. Indeed, 5s are right on 4.5yr trendline/channel support at 1.756%/1.775%, while 30s are just shy of 20 year channel support and the 100m average at 4.05%. Indeed, monthly momentum in 30s has reached oversold for the 1st time since 2000.

Given the momentum conditions, THESE LEVELS ARE NOT GOING TO GIVE WAY WITHOUT A FIGHT. TREASURY BEARS BEWARE.

Key resistance for each point on the curve is varied. For 5s, a correction could come in the form of a 1.775%/1.659% range, but if 1.659% goes, we risk a 11bp decline. In 10s, stops are likely below 2.935%, through which confirms a top and turn lower to 2.88% and below, while in The Bond bulls need a break of 3.762% to confirm a top, exposing a push to 3.563%/3.461%.

Turning to the curve (5s30s) we hold a near term neutral bias within the 230.9bps/204.9bps, preferring to fade the range extremes. However, on a long term basis, the trend is for FLATTENING, with a break of 205bps/195.1bps opening retracement support at 146bps and below.

€/$ in trouble, but $/¥ is at risk as well.

Ahead of event risk, evidence continues to build for a lower €/$. A daily close below 1.3581/1.3548 (6m trendline & 100d average) confirms a turn lower, exposing the 200d (now 1.3335) and below.

Meanwhile, we remain very cautious on $/¥, as the 3m uptrend is increasingly vulnerable to a top and reversal. The bearish daily momentum divergences and completing 5 wave advance from both Feb’12 and Oct’13 says that additional strength is limited before a top and turn.

Given the strong correlation between $/¥ and US 10yr yields; a break down in yields could be the catalyst for such a reversal. 103.74 (May’13 high) is key support. A sustained break below confirms the turn, exposing the 200d at 99.70 and likely below.

Gold remains in trouble

Despite the rally in the US $, gold has proven to be very resilient. However, stay bearish against 1251/1270. Against here, the downtrend remains on firm footing for a test and break of the Jun lows at 1180, opening LONG-TERM PIVOTAL SUPPORT BETWEEN 1127/1087

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

Proving once again that if you want something done wrong, and preferably at massive cost overruns, then just leave it to the government, moments ago news broke that the main IT contractor behind the embarrassment that is healthcare.gov – CGI Federal – has been fired. Who could possibly foresee this? Well, anyone who had actually done some diligence on the clusterfuck that is CGI Federal, and which as WaPo profiled some time ago, “is filled with executives from a company that mishandled at least 20 other government IT projects, including a flawed effort to automate retirement benefits for millions of federal workers, documents and interviews show.” Make that 21. “A year before CGI Group acquired AMS in 2004, AMS settled a lawsuit brought by the head of the Federal Retirement Thrift Investment Board, which had hired the company to upgrade the agency’s computer system. AMS had gone $60 million over budget and virtually all of the computer code it wrote turned out to be useless, according to a report by a U.S. Senate committee.” Sounds like the perfect people to hire in order to make a complete disaster out of the Obamacare portal – almost as if by design.

But the best news? Obama’s little tryst with CGI Federal cost US taxpayers only $292 million. As Vanity Fair revealed recently, “According to congressional testimony, CGI stands to be paid $292 million for its work on healthcare.gov.” And since the CGI replacement will eventually redo everything from scratch, this is $292 million that Obama may have as well burned.

We jest, but the incest between the Obama administration and CGI will one day be probed. According to recent revelations the ties run deep:

That lack of expertise explains why in building healthcare.gov, the government turned to industry contractors; in particular, to CGI Federal, a subsidiary of CGI Group, a Canadian company. To those uninitiated in the dark art of government contracting, it seems scandalous that CGI, a company most Americans had never heard of, a company that is not located in Silicon Valley (where President Obama has plenty of Internet superstar friends who could have formed a dazzling brain trust to implement his signature legislation) but rather in Montreal, could be chosen as the lead contractor for the administration’s most important initiative. While right-wing news outlets have focused on the possible relationship between Toni Townes-Whitley, senior vice president for civilian-agency programs at CGI Federal, and Michelle Obama, both of whom were 1985 Princeton graduates, CGI’s selection is probably more an example of a dysfunctional system than it is a scandal. “A lot of the companies in Silicon Valley don’t do business with the government at that level [the level required for federal contracting],” explains Soloway. “It is very burdensome, and the rules make it very unattractive.” Indeed, government contractors have to meet a whole host of requirements contained in a foot-thick book, including cost accounting and excessive auditing, to prove that they are not profiting too much off the American taxpayer. Hence, there tends to be a relatively small, specialized group of companies that compete for this work, even on such critical matters as healthcare.gov.

Actually it is a scandal. And it is a bigger scandal that at least $292 million in taxpayer cash was literally flushed down the drain and all we have to show for it is a website that crashes when the seemingly impossible happens, and more than a few hundred people try to log in at the same time. Then again perhaps, since it’s no longer 1993, someone in the administration should take responsibility for this? Or maybe it was just Bush’s fault again (and it snowed in December).

Keep in mind, CGI’s coding disaster was so epic, there actually is a flowchart indicating just how many errors in healthcare.gov there are.

So with CGI out of the picture, who will take over administration of the Obamacare portal? WaPo has the answer: “Federal health officials are preparing to sign a 12-month contract worth roughly $90 million, probably early next week, with a different company, Accenture, after concluding that CGI has not been effective enough in fixing the intricate computer system underpinning the federal Web site, HealthCare.gov, the individual said.”

And this pearl: “Because of time constraints, CMS is awarding the Accenture contract on a sole-source basis, according to the person familiar with the decision.”

So is that what kickbacks to Michelle Obama are called now?

We can be sure of one thing: this replacement will be an even more epic disaster and will ultimately result in over a billion taxpayer dollars being spent on a program that was doomed to failure from the beginnin regardless.

Accenture, which is one of the world’s largest consulting firms, has extensive experience with computer systems on the state level, and it built California’s new health insurance exchange. But it has not done substantial work on any federal health-care program.

There is a small chance Accenture won’t be as much of a debacle as CGI. Keep in mind that the government is very familiar with the consulting company’s skill se: after all the DOJ itself sued it!

The decision to turn to Accenture puts the project in the hands of a government contractor that has significant technological expertise but also signed a high-profile legal settlement with the Justice Department less than three years ago over its contracting practices.  Accenture had one contracting dispute with the federal government that ended up in court, agreeing in September 2011 to pay $63 million to settle a Justice Department lawsuit alleging that it improperly benefitted from recommending specific hardware and software as part of government contracts, as well as inflating prices on contracts and distorting the federal bidding process.

In retrospect who are we kidding: Accenture is certainly the best replacement to CGI…  if the intention is to keep bleeding the government’s taxpayer funded coffers dry. And why not: if said coffers run out of money, the Fed can just print some moar.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hS5kiJjZprA/story01.htm Tyler Durden

While this morning’s dismal jobs data is being blamed on the weather (despite no other recent indicator reflecting the same effect), it seems New Yorkers are not afraid of the cold. In fact, as FoxNY reports, it seems there is a new ‘must-have’ for the New Year – a Union Job. 1,500 people have been on line since 1pm on Tuesday for a ‘coveted’ union job that pays $17.20 per hour (for painting and decorating apprenticeships) and could lead to a full-time union position. Forget the iPhone5S, union jobs is where it’s at…

 

New York News

 

Via FoxNY,

The line wrapped nearly around an entire city block on Friday as approximately 1,500 people waited in Queens for a chance to apply for a coveted union job.

 

The first few people on line had been there since 1 p.m. on Tuesday when the temperature in New York City was in the single digits.

 

District Council 9 is accepting 500 applications in Long Island City for painting and decorating apprenticeships.

 

The hired will receive a salary of $17.20 an hour during the first year.

 

The apprenticeship could lead to a full time union position.

 

Maybe Apple (or Microsoft or Sony) should consider offering a union-job with the next release of their products? Given today’s jobs data, we suspect the demand for the latter may outstrip demand for the former very very soon…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5cLHXo4K_Bk/story01.htm Tyler Durden

The Grand SCOTUS Facade

By

Cognitive Dissonance

 

There is a widely held and increasingly difficult to believe myth that the three branches of the United States government operate independently from each other, thus acting as checks and balances upon each other. And the reality is that as long as it suits The Empire’s self interest those three branches of government will outwardly appear to operate as directed by the constitution.

But if the supremacy of The Empire is threatened by external or internal forces those very same three governmental branches, either separately or in unison, will act to protect The Empire and its special interests………and the Constitution be damned if it gets in the way. Let me repeat that. The Empire will protect itself from itself, from its own greed, corruption, malfeasance, incompetence and especially from its oppressed and enslaved citizens. It is then that the facade of separation of powers begins to slip and fade away.

For example in decades past the Supreme Court of the United States (SCOTUS) affirmed slavery in America and then approved by abstention Abraham Lincoln’s blatantly unconstitutional power grab from the states, only to rule against it after the Civil War had ended and the damage had been done. Incredibly they even ratified the corralling of US citizens of Japanese descent during WW2 and the taking of their property without compensation.

And just recently The SCOTUS confirmed that the Affordable Care Act, aka Obamacare, was constitutional because it’s just a little tax after all. Some said this was a surprising decision, but we knew it was a slam dunk because it supported the teetering Empire with additional tax revenue and control of its ‘citizens’. And this doesn’t even begin to cover the actual list of Empire ass covering rulings by The SCOTUS nor does it mention the long list of legislative or executive affronts to ‘We the People’.

Similarly, as long as it suited The Empire the myth was widely propagated that the USA was the land of milk and honey and egalitarianism ran riot in the streets. As long as productivity increases outpaced the cost of gruel and there was still plenty of financial leverage to exploit, the slaves of the nation were fed a steady propaganda diet of shared prosperity for their share of the elbow grease.

This comforting myth was helped along by switching from one wage earner households to two under the guise of equal rights for women and upward mobility for all. In addition, plenty of cool gadgets and baubles were produced and sold (at double the cost plus profit of course, this being the birth place of [crony] capitalism) in order to entertain the debt and wage slaves while carefully disguised, but none-the-less much higher than advertised, inflation ate them alive.

Now that it is no longer in the best interest of the now bloated and corrupt Empire to maintain the facade, the pretty red velvet curtain at the back of the stage is slowly being removed and the crumbling brick wall is exposed for all to see. It’s time to tighten our belts my fellow peons because the elite are having trouble maintaining their year over year double digit increases in wealth.   

As many are beginning to realize, the dismantling of the middle class has begun in earnest and the various branches of government are now obviously and blatantly rallying to protect and serve The Empire. This is accomplished using many brilliantly applied techniques such as bait and switch social programs, bread and circuses for the masses, fear mongering for the weak willed and impressionable, nationalistic propaganda, manufactured left/right ideological conflicts and that old standby, good old fashioned subterfuge. Who doesn’t love it when they slop more lipstick on the pig and slap another coat of wet paint on the dry rot?

It was with this firmly in mind that I stumbled across a photo essay in Politico Magazine entitled “18 Photographs That Will Change Your View of Washington”. This was not my fault; I clicked on a link, then another link, then another when suddenly I found myself in the cesspool of Politico Magazine. Upon arriving and realizing I was already knee deep in DC excrement I plunged ahead and clicked away.

What I found after the third or fourth click took my breath away and shocked me in a way I had never quit experienced. I was so startled that I just stared at the image open mouth and mesmerized, not quite believing my eyes, stunned that ‘they’ would do such a thing. At one point I turned to Mrs. Cog in disbelief and begged her to look at my screen and confirm that what I was seeing wasn’t really what I was seeing. Alas, Mrs. Cog verified that while I may be old and senile, my cataracts had not blurred my vision to such an extent that what I thought I was seeing was not.

It seems that the exterior of the Supreme Court building is undergoing what was described as renovations and some scaffolding needed to go up. While it didn’t mention why they do so, it is common practice to place tarps over the exterior of the scaffolding to catch stray dirt and debris. In fact I believe that somewhere in the constitution there is a passage about keeping the Supreme Court Justice’s black robes clean at all costs during remodeling, so the tarps were completely understandable.

What was so alarming to me was the image that had been printed on the tarp which covered the entire depth and breadth of the SCOTUS building. A life size (and anatomically correct) picture of the SCOTUS building facade had been painted on the tarp, which was in turn covering the actual SCOTUS building facade, which itself is just an architectural fantasy and placed there only to project an image of strength, integrity and justice for all. I was staring at a simulation of a simulation of a lie if you will, and at taxpayers’ expense no less. Simply amazing the size balls these guys and gals have.

Personally I suspect they’re looting the place under cover of tarp and when the wraps come off martial law will go up and the ugly brick wall will be fully exposed for all to see. Of course this is precisely when the SCOTUS will spring into action and rule that the final nail driven into the constitution is in fact constitutional precisely because it serves to support The Empire.

It is my understanding that something similar was done to the Washington Monument while they repaired the damage done by God’s wrath, also known as an earthquake. And now I read that the Dome of the U.S. Capital Building is currently undergoing a two year restoration because that too is falling apart at the seams. No word yet on if they will paint a picture of the dome on the Dome, but personally I vote for an image of the Three Stooges instead. It’s so apropos.

 

01-10-2014

Cognitive Dissonance

 

P.S. – Don’t you just love this image of some tourists taking a picture of the picture of the SCOTUS facade? It speaks volumes about your average American.

Then again, the above picture is a picture of tourists taking pictures of a picture of the SCOTUS facade. Just where this all ends is anybody’s guess. Cue the hall of mirrors.

<Please, someone take a screenshot of this image and pass it on. It’s the patriotic thing to do. >

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/J2VPMg0OzOg/story01.htm Cognitive Dissonance

While excess risk-taking and broken markets likely dominate their thinking, the ‘real economic recovery’ meme the Fed is using to enable them to ‘taper’ their excesses. However, investors remain assured that if things get worse once again then the Fed will crank the presses and save the assets. It seems they have found their new excuse – no matter what…

• *LACKER EXPECTS ‘A LOT OF TURMOIL’ IN HEALTH CARE INDUSTRY
• *LACKER SAYS FED WILL BE WATCHING HEALTHCARE CLOSELY IN NEXT FEW YEARS

So, despite admitting asset-bubbles, fears over stock-multiples and excessively easy lending; the Fed will launch QE5 when Obamacare drags the US economy into trouble…

• LACKER SAYS HEALTHCARE ACT COULD HAVE SUBSTANTIAL ECONOMIC IMPACT, SMALL BUSINESS LOOKING FOR HOW BEST TO HANDLE

But – that’s not what Obama said!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BlcX_ymPRm8/story01.htm Tyler Durden