Japan's 2014 Budget To Approach Record 100 Trillion Yen

Since we live in a connected world, in which the central bank “Flow” must, well, flow, one emerging line of thought is that with the Fed set to taper (even by a modest $10 billion per month driven by Treasury market liquidity constraints where the Fed is now monetizing 1% of the entire bond market in 10 Year equivalents every three weeks), the BOJ will have to step in and boost its own monetization by a comparable amount. And as we noted in November, speculation that the BOJ will do just this set off the latest Yen crushing move, which has seen the EURJPY surge higher by a massive 1000 pips all but pricing in any BOJ moves for 2014. However, to be able to do this, Japan will need to provide its central bank with the capacity to monetize as many Treasurys (or more) as possible: after all, Japan like the US is already soaking up a record 70% of all gross issuance.

And Japan is ready to comply: as Reuters reports, in the next fiscal year, Japan’s budget will exceed 96 trillion yen, or about $930 billion. With Japan’s GDP standing currently shy of half a quadrillion Yen (not to be confused with Japan’s debt load which is now over the one quadrillion mark), it means the budget will be about 20% of the country’s entire economic output.

More from Reuters:

The government is in final negotiations on the general-account budget for the year from April, which will exceed 96 trillion yen ($931 billion), the sources told Reuters on condition of anonymity.

 

The draft budget, to be approved by Prime Minister Shinzo Abe’s Cabinet on December 24, will be up from this fiscal year’s initial budget of 92.6 trillion yen.

 

Abe, elected a year ago Monday, has used heavy government spending as one of his main tools in a bid to end 15 years of deflation and sluggish growth for the world’s third-biggest economy. But with public debt of more than twice the size of the economy, Abe also aims to balance the budget over time, starting with a sales-tax increase next April.

 

With an economic rebound and a tax increase, tax revenues next fiscal year are tipped to clear 50 trillion yen, a seven-year high, while bond issuance will decrease from this year’s 42.85 trillion yen, the sources said.

So while the total spending framework has already been set, it remains to be seen if and how much tax revenues will indeed pick up providing the funding for about half of the spending needs. And if they don’t, so much the better: it means debt deficit-funding will only rise, giving the BOJ even more dry powder which to monetize and flood the global system with even more excess reserves.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/SUNcjaS83GE/story01.htm Tyler Durden

Japan’s 2014 Budget To Approach Record 100 Trillion Yen

Since we live in a connected world, in which the central bank “Flow” must, well, flow, one emerging line of thought is that with the Fed set to taper (even by a modest $10 billion per month driven by Treasury market liquidity constraints where the Fed is now monetizing 1% of the entire bond market in 10 Year equivalents every three weeks), the BOJ will have to step in and boost its own monetization by a comparable amount. And as we noted in November, speculation that the BOJ will do just this set off the latest Yen crushing move, which has seen the EURJPY surge higher by a massive 1000 pips all but pricing in any BOJ moves for 2014. However, to be able to do this, Japan will need to provide its central bank with the capacity to monetize as many Treasurys (or more) as possible: after all, Japan like the US is already soaking up a record 70% of all gross issuance.

And Japan is ready to comply: as Reuters reports, in the next fiscal year, Japan’s budget will exceed 96 trillion yen, or about $930 billion. With Japan’s GDP standing currently shy of half a quadrillion Yen (not to be confused with Japan’s debt load which is now over the one quadrillion mark), it means the budget will be about 20% of the country’s entire economic output.

More from Reuters:

The government is in final negotiations on the general-account budget for the year from April, which will exceed 96 trillion yen ($931 billion), the sources told Reuters on condition of anonymity.

 

The draft budget, to be approved by Prime Minister Shinzo Abe’s Cabinet on December 24, will be up from this fiscal year’s initial budget of 92.6 trillion yen.

 

Abe, elected a year ago Monday, has used heavy government spending as one of his main tools in a bid to end 15 years of deflation and sluggish growth for the world’s third-biggest economy. But with public debt of more than twice the size of the economy, Abe also aims to balance the budget over time, starting with a sales-tax increase next April.

 

With an economic rebound and a tax increase, tax revenues next fiscal year are tipped to clear 50 trillion yen, a seven-year high, while bond issuance will decrease from this year’s 42.85 trillion yen, the sources said.

So while the total spending framework has already been set, it remains to be seen if and how much tax revenues will indeed pick up providing the funding for about half of the spending needs. And if they don’t, so much the better: it means debt deficit-funding will only rise, giving the BOJ even more dry powder which to monetize and flood the global system with even more excess reserves.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/SUNcjaS83GE/story01.htm Tyler Durden

Jacob Sullum on Mandatory Guilty Pleas

Before Weldon Angelos received the equivalent of
a life sentence for three small-time marijuana sales, prosecutors
offered him a plea deal that would have resulted in 40 fewer years
behind bars. When the penalty for going to trial can be that heavy,
says Senior Editor Jacob Sullum, it’s not surprising that only
three percent of federal drug offenders choose that option. Sullum
explains how mandatory minimum sentencing rules force drug
offenders to plead guilty.

View this article.

from Hit & Run http://reason.com/blog/2013/12/16/jacob-sullum-on-mandatory-guilty-pleas
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Swiss Propose Treating Bitcoin Like Any Other Foreign Currency

While the ECB (and the Fed) continues to warn (danger of theft), threaten (asset-ize and tax it!), or de-bunk the idea of virtual currencies (despite two of the world's largest banks apparently seeing value in the idea), the Swiss Parliament is proposing a different angle. A postulate signed by 45 (of 200) members of parliament asks for bitcoin to be treated as any other foreign currency – and examine the potential bitcoin-related opportunities for the Swiss financial sector.

Via Coindesk,

The Swiss Parliament is considering a postulate that asks for bitcoin to be treated as any other foreign currency. The goal of the postulate, introduced by representative Thomas Weibel, is to eliminate ambiguities and increase legal certainty related to bitcoin.

 

 

The postulate petitions the executive branch to reply to four basic questions: whether or not bitcoin represents an opportunity for the financial sector, should bitcoin be treated as a foreign currency, what regulatory instruments should be used to establish legal certainty for bitcoin and similar currencies, and what sort of regulatory changes are needed and when can they be implemented.

 

The postulate was co-signed by 45 members of parliament (out of a possible 200) after they came to the conclusion that bitcoin can create new opportunities for the Swiss financial sector and that measures should be taken to regulate the application of VAT and the execution of money laundering controls.

 

 

Luzius Meisser, president of Bitcoin Association Switzerland, told CoinDesk: “This would be quite revolutionary, as it provides bitcoin with additional legitimacy and could serve as a precedent for other countries. Also, it would pave the way for businesses to use bitcoins without legal uncertainty in Switzerland.”

The crucial point here, of course, is if Bitcoin is 'deemed' an asset (as EU regulators appear to want), it can (and will) be taxed; but it seems the Swiss beg to differ with that definition.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/C1LhW-NCI0o/story01.htm Tyler Durden

Big Dog, Wild Cat And Cheetah: Meet Google's Brand New Robotic Zoo

Big Dog, Wild Cat, Cheetah… all names one wouldn’t associate with Google (if anything perhaps feline-named Apple operating systems). And yet, the company that is best know for its internet prowess and having more data about the search habits and private interests of each and every computer user than the NSA could ever dream of, is ever more aggressively moving into the animal kingdom. The robotic one that is.

After last weekend, 60 Minutes ran an amusing infomercial of Amazon’s latest very forward multiple boosting product development with its delivery drones, Google refuses to lag behind in the futurism department and promptly acquired Boston Dynamics, the creator of the world’s fastest running robot, as well as various other realistic animal-like machines supplied to the US military. As the FT reports, “The internet company’s acquisition of Boston Dynamics is latest in a string of robotics acquisitions in a mysterious initiative led by former Android chief Andy Rubin.”

Just what robotic creaters will carry Google’s logo?

Among the creations to crawl, jump and gallop from its labs are Big Dog, a four-legged robot that can clamber over uneven terrain such as snowy forests, even when assailed by kicks from its makers, and Cheetah, which claims to hold the record for the fastest legged robot in the world, running at more than 29 miles per hour.

 

Many of Boston Dynamics’ robots have been developed with funding from the US Department of Defense’s research unit, Darpa, making Google a military contractor, at least for now.

 

Google’s ultimate objective for its growing collection of robots remains unclear but Mr Rubin’s project sits among its so-called “moonshot” ventures, such as self-driving cars and balloons to provide internet connectivity to remote regions.

 

His other acquisitions include Bot & Dolly, a design studio that makes an automated camera system used in movies such as Gravity, and Schaft, a spin-off from the University of Tokyo whose bipedal robots boast much stronger “muscles” than other bots.

 

Boston Dynamics was founded in 1992 by Marc Raibert, formerly of the Massachusetts Institute of Technology. A much-viewed YouTube video shows Boston Dynamics’ four-legged WildCat robot “galloping” and “bounding” around a car park at speeds of 16 miles per hour, before – perhaps reassuringly – falling to its knees on ice.

The response has so far been one of mild amusement: “Which company that owns all our private data and has the motto “Don’t Be Evil” just bought a military robotics firm?” tweeted Joe Randazzo, creative director at Adult Swim, a comedy and satire channel. “‘Don’t be evil,’ he cried, while being chased by the robot hounds,” quipped Andy Baio, a tech entrepreneur and founder of the XOXO conference, in a tweet.

One can only hope that in borrowing some robotic folklore from Isaac Asimov, the prime directive of Google’s robotic farm will indeed be “don’t be evil” or else the amusement will be short-lived.

A quick summary of Google’s latest robotic product portfolio:


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/V_h5_vJVqBc/story01.htm Tyler Durden

Big Dog, Wild Cat And Cheetah: Meet Google’s Brand New Robotic Zoo

Big Dog, Wild Cat, Cheetah… all names one wouldn’t associate with Google (if anything perhaps feline-named Apple operating systems). And yet, the company that is best know for its internet prowess and having more data about the search habits and private interests of each and every computer user than the NSA could ever dream of, is ever more aggressively moving into the animal kingdom. The robotic one that is.

After last weekend, 60 Minutes ran an amusing infomercial of Amazon’s latest very forward multiple boosting product development with its delivery drones, Google refuses to lag behind in the futurism department and promptly acquired Boston Dynamics, the creator of the world’s fastest running robot, as well as various other realistic animal-like machines supplied to the US military. As the FT reports, “The internet company’s acquisition of Boston Dynamics is latest in a string of robotics acquisitions in a mysterious initiative led by former Android chief Andy Rubin.”

Just what robotic creaters will carry Google’s logo?

Among the creations to crawl, jump and gallop from its labs are Big Dog, a four-legged robot that can clamber over uneven terrain such as snowy forests, even when assailed by kicks from its makers, and Cheetah, which claims to hold the record for the fastest legged robot in the world, running at more than 29 miles per hour.

 

Many of Boston Dynamics’ robots have been developed with funding from the US Department of Defense’s research unit, Darpa, making Google a military contractor, at least for now.

 

Google’s ultimate objective for its growing collection of robots remains unclear but Mr Rubin’s project sits among its so-called “moonshot” ventures, such as self-driving cars and balloons to provide internet connectivity to remote regions.

 

His other acquisitions include Bot & Dolly, a design studio that makes an automated camera system used in movies such as Gravity, and Schaft, a spin-off from the University of Tokyo whose bipedal robots boast much stronger “muscles” than other bots.

 

Boston Dynamics was founded in 1992 by Marc Raibert, formerly of the Massachusetts Institute of Technology. A much-viewed YouTube video shows Boston Dynamics’ four-legged WildCat robot “galloping” and “bounding” around a car park at speeds of 16 miles per hour, before – perhaps reassuringly – falling to its knees on ice.

The response has so far been one of mild amusement: “Which company that owns all our private data and has the motto “Don’t Be Evil” just bought a military robotics firm?” tweeted Joe Randazzo, creative director at Adult Swim, a comedy and satire channel. “‘Don’t be evil,’ he cried, while being chased by the robot hounds,” quipped Andy Baio, a tech entrepreneur and founder of the XOXO conference, in a tweet.

One can only hope that in borrowing some robotic folklore from Isaac Asimov, the prime directive of Google’s robotic farm will indeed be “don’t be evil” or else the amusement will be short-lived.

A quick summary of Google’s latest robotic product portfolio:


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/V_h5_vJVqBc/story01.htm Tyler Durden

S&P 500 Surges 30 Points Off Overnight Lows

“Priced In” appears to be the meme of the day but the overnight collapse in S&P 500 futures – perfectly tagging the 50DMA – was met with a slowly building avalanche of BTFATH-ers unable to resist missing out of the December Triple Witching seasonality. While stocks are screaming higher, the USD is practically unchanged, gold and silver have rallied back to unchanged, and Treasuries are modestly lower in yield.

 

 

Bonds moved first on the IP data, then stocks spiked on the US open…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/R2Zo_9fsfdo/story01.htm Tyler Durden

S&P 500 Surges 30 Points Off Overnight Lows

“Priced In” appears to be the meme of the day but the overnight collapse in S&P 500 futures – perfectly tagging the 50DMA – was met with a slowly building avalanche of BTFATH-ers unable to resist missing out of the December Triple Witching seasonality. While stocks are screaming higher, the USD is practically unchanged, gold and silver have rallied back to unchanged, and Treasuries are modestly lower in yield.

 

 

Bonds moved first on the IP data, then stocks spiked on the US open…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/R2Zo_9fsfdo/story01.htm Tyler Durden

Industrial Production Surges Due To Cold Weather Boost For Utility Demand

Stocks are un-surging on the “good” news in the headline beats for Industrial Production (biggest jump and biggest beat in 13 months) and Capacity Utilization (best since June 08). However, as is always the case, the underlying data hides some less than positive signs. The bulk of the gains in production were from Utilities (+3.9%) as colder-than-expected temperatures boosted demand (the same temps that retailers are crying about). Manufacturing output remains 3.6% below its pre-recession peak (though gains were broad-based).

 

Note the last spike of this magnitude was around the time of Sandy – and was entirely unsustainable…

 

 

Charts: Bloomberg


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/yvRFNg2F3aA/story01.htm Tyler Durden

Unconfirmed Reports Of Explosives In Four Harvard Buildings Prompt Evacuation

The bomb scare has moved to the Ivies. Just out from the Harvard twitter account:



    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/nnAKcRngWF0/story01.htm Tyler Durden