Drone Testing Sites Named, Police Deaths Drop, Obamacare Rules Hit Vending Machines: P.M. Links

  • I don't suppose pointing out that the items inside already have calorie counts on them will make a difference, will it? No, of course not.Keep your eyes on the skies in
    Alaska, Nevada, New York, North Dakota, Texas and Virginia. Those
    are the states selected by the federal government for
    drone test sites
    .
  • The incoming mayor of Boston is not on board with the police
    there getting
    AR-15 rifles
    .
  • As said police continue their efforts to militarize, 2013 saw
    the
    fewest number of police killed
    by firearms since 1887. More
    were killed in car crashes. Overall deaths in the line of duty are
    the lowest since 1959.
  • But what about those on the other side of that thin blue line?
    In Seattle, shootings by the police accounted for
    one-fifth of all homicides
    in the city, six out of 29. Police
    officials there blame poor management of those with mental
    illnesses.
  • The latest stupid revelation from the unexplored innards of the
    Affordable Care Act is that next year vending machines will be
    required to show
    calorie counts
    for the products inside. This is expected to
    cost vendors (and therefore consumers) about $25 million a
    year.
  • France’s proud rejection of Economics 101 continues apace. The
    government has given approval to a
    75 percent tax on the rich
    . It has also ordered car services
    like Uber to institute a
    15-minute wait
    before picking up riders in a completely
    undisguised move to protect taxi drivers from competition.

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from Hit & Run http://reason.com/blog/2013/12/30/drone-testing-sites-named-police-deaths
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Ira Stoll on Fixing a Broken Window

Some knucklehead threw a brick
through Ira Stoll’s car window the other night while the vehicle
was parked on the street in Washington, D.C. But this isn’t a
column about how criminals are knuckleheads or about how the D.C.
government is foolish to require out-of-town visitors to leave
valuable bait for criminals on display overnight behind glass
windshields, Instead, Stoll stops to marvel at the modern
technology and free market competition that combined to get the car
fixed, curbside, in less than three hours from when the police left
the scene—and on a holiday weekend, no less.

View this article.

from Hit & Run http://reason.com/blog/2013/12/30/ira-stoll-on-fixing-a-broken-window
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Bonds Best, Bullion Battered, But Protection Well Bid…

For the 3rd day in a row, traders in credit and equity markets bid for protection. VIX rose 1 vol to 13.5% (diverging notably from stocks) and High-yield and investment-grade credit protection is back at 1-week wides (again diverging notably from stocks). USD weakened back to pre-FOMC levels (-0.4% on the day) led by EUR liquidity needs by the look of it, was ignored by the commodity markets which saw silver and gold tank (gold < $1200) and WTI crude back under $100. Treasuries rallied modestly (yields -3bps) as stocks wriggled sideways on super-low volumes (with NASDAQ underperforming and Dow outperforming to break the new record-high 16,500 level). Homebuilders outperformed even after the dismal home sales data with Energy worst on the day.

Today's S&P 500 futures range was the lowest in 6.5 years…

 

The Dow closed above 16,500  at another record high but note that high-beta Russell 2000 dumped into the close…

 

Managers are protecting gains in stocks…

 

and credit…

 

Commodities – especially precious metals – were hammered… (despite news of the China gold imports dropping 12 hours ago, when it hit Bloomberg headlines it seemed to trigger more selling this afternoon)…

 

The USD fell once again back at FOMC levels…(notice any pattern post-taper? sell European session, buy US session?)

As an aside, while correlation with JPY crosses remains – it is clearly fading (and only in sync during US session today).

 

Treasuries rallied on the day – though most of the strength was during the European session…

 

Charts: Bloomberg

Bonus Chart: Gas Prices have never been higher for this time of year and are at 2-month highs…

 

Bonus Bonus Chart: The TWTR BTFD'ers were out en masse – but had an ugly close as the stock-du-jour closed close to bear market territory…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-1QcNpaPulE/story01.htm Tyler Durden

Poll: Only 17 Percent of Americans Support the War in Afghanistan

According to a CNN/ORC International survey
released today, only 17 percent of Americans support the war in
Afghanistan and most Americans want the troops there home before
the December 2014 deadline. The war may be the most unpopular in
American history.

From
CNN
:

Just 17% of those questioned say they support the 12-year-long
war, down from 52% in December 2008. Opposition to the conflict now
stands at 82%, up from 46% five years ago.

“Those numbers show the war in Afghanistan with far less support
than other conflicts,” CNN Polling Director Keating Holland said.
“Opposition to the Iraq war never got higher than 69% in CNN
polling while U.S. troops were in that country, and while the
Vietnam War was in progress, no more than six in 10 ever told
Gallup’s interviewers that war was a mistake.”

The CNN/ORC International poll is the latest poll
suggesting that Americans are becoming increasingly disillusioned
with an interventionist foreign policy. Earlier this month, the Pew
Research Center released its poll examining how American’s view the
United States’ place in the world. For the first time in the
history of the poll (almost fifty years), more than half of the
respondents agreed with the statement, “The U.S. should mind its
own business internationally and let other countries get along the
best they can on their own.”


Not only do more than half of Americans as a whole support being
less involved abroad, more than half of Republicans and
Independents also believe that the U.S. should mind its own
business:

About half of independents (55%) and Republicans (53%) and 46%
of Democrats say the United States should mind its own business
internationally. In 2002, following the 9/11 attacks, 27% of
independents, 22% of Republicans and 40% of Democrats wanted the
United States to mind its own business internationally.

That most Americans are fed up with the war in Afghanistan and
want the U.S. to mind its own business is good news for
non-interventionist Republicans such as Sen. Rand Paul (R-Ky.).

It is good news that most Americans oppose an interventionist
foreign policy and that the vast majority do not support the
longest war in U.S. history. Unfortunately, foreign policy is only
one of
the issues
on which the opinions of American lawmakers differ
from those of the American public.

from Hit & Run http://reason.com/blog/2013/12/30/poll-only-17-percent-of-americans-suppo
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“What The Bubble…” Chart Of The Day: Half Of Loans Issued In 2013 Were “Covenant Lite”

If you ask anyone at The Fed (apart from Jeremy Stein) if there is a bubble in the credit markets, the answer is definitive “no” since bubbles are always obvious. Well, hopefully, the following chart will make it “obvious” that the Fed’s policy has driven a ‘reach for yield’ so excessive as to explode the growth of so-called cov-lite loans. This ‘riskiest of risky’ loan issuance, while already at record high levels, has now massively exceeded the previous bubble in terms of percent issued as the demand for anything with yield ‘enables’ the worst of the worst companies to refinance their zombie-like existence.

Cov-lite issuance is over 45% of all loan issuance in 2013!!!

(bear in mind that the great majority of this issuance is being used for refinancing – not capex or growth-related spending)

In context – that is more than double the amount of the last bubble peak!!

 

With firm leverage at record highs

 

…and record margin debt in stocks, as we warned two months ago, record-high exposure to these risky credit structures (and the re-emergence of CLOs to concentrate them) is, we are sure, nothing to worry about… because it’s different this time.

 

[Addenda: while December is always a slower month, we do note that Cov-Lite issuance is at its lowest since the mid-sumer Taper tantrum… – perhaps risk is being repriced a little?]

 

Source: Bloomberg


    



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

"What The Bubble…" Chart Of The Day: Half Of Loans Issued In 2013 Were "Covenant Lite"

If you ask anyone at The Fed (apart from Jeremy Stein) if there is a bubble in the credit markets, the answer is definitive “no” since bubbles are always obvious. Well, hopefully, the following chart will make it “obvious” that the Fed’s policy has driven a ‘reach for yield’ so excessive as to explode the growth of so-called cov-lite loans. This ‘riskiest of risky’ loan issuance, while already at record high levels, has now massively exceeded the previous bubble in terms of percent issued as the demand for anything with yield ‘enables’ the worst of the worst companies to refinance their zombie-like existence.

Cov-lite issuance is over 45% of all loan issuance in 2013!!!

(bear in mind that the great majority of this issuance is being used for refinancing – not capex or growth-related spending)

In context – that is more than double the amount of the last bubble peak!!

 

With firm leverage at record highs

 

…and record margin debt in stocks, as we warned two months ago, record-high exposure to these risky credit structures (and the re-emergence of CLOs to concentrate them) is, we are sure, nothing to worry about… because it’s different this time.

 

[Addenda: while December is always a slower month, we do note that Cov-Lite issuance is at its lowest since the mid-sumer Taper tantrum… – perhaps risk is being repriced a little?]

 

Source: Bloomberg


    



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

Jane Austen Explains Monetary Policy

Who knew? Jane Austen was a dyed-in-the-wool, easy-money-loving, stimulus-demanding ‘expert’ on monetary policy. As Citi’s Steven Englander finds in his eloquent new year’s note, it seems the antiquated authoress has much sense-and-sensibility to reproach those of us who believe in real money and a return to a real economy. From justifying QE, “Money is the best recipe for happiness,” to the importance of the wealth effect, “If this man had not twelve thousand a year, he would be a very stupid fellow;” Austen offers some ‘balance’ to offer on Fed transparency, tapering, and congressional spending.

Via Citi’s Steve Englander,

‘Elinor now found the difference between the expectation of an unpleasant event, however certain the mind may be told to consider it, and certainty itself.” – particularly apt in light of the market reaction to tapering.

“Finish it at once. Let there be an end of this suspense. Fix, commit, condemn yourself.”  — more on tapering

“A watch is always too fast or too slow. I cannot be dictated to by a watch.”  — on the tapering calendar

“I have not wanted syllables where actions have spoken so plainly.”  — advice on communications policy

“I think we are a great deal better employed, sitting comfortably here among ourselves, and doing nothing.”  — insight into labor force participation

“I do not think it worth while to wait for enjoyment until there is some real opportunity for it.”  — the hysteresis effect

“A large income is the best recipe for happiness I ever heard of.” – on the need for more stimulus

“I am sorry to tell you that I am getting very extravagant and spending all my money: and what is worse for you, I have been spending yours too. ”  —  message to Congress

“If this man had not twelve thousand a year, he would be a very stupid fellow.” – the importance of the wealth effect for human capital

“Money is the best recipe for happiness.” – QE justified

“If things are going untowardly one month, they are sure to mend the next.”   — on economic forecasting

“There is a monstrous deal of stupid quizzing, & common-place nonsense talked, but scarcely any wit.”  — FOMC press conferences

“It would be most right, and most wise, and, therefore must involve least suffering.” –taking the easy policy route

“We do not look in great cities for our best morality.” – distribution effects of QE

“I don’t approve of surprises. The pleasure is never enhanced and the inconvenience is considerable.” — the argument for Fed transparency

“It is particularly incumbent on those who never change their opinion, to be secure of judging properly at first.”  — nothing more need be said

“..people always live forever when there is an annuity to be paid them”  — on the need for entitlements reform

“And we mean to treat you all,’ added Lydia, ‘but you must lend us the money, for we have just spent ours at the shop out there.” – on balance sheet expansion


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/dz_mLQs6oFg/story01.htm Tyler Durden

Shorting Stocks On These January POMO Days May Be Hazardous For Your Health

Death, (rising) taxes, and shorting stocks on POMO days resulting in lots of margin pain: those were the near certainties of 2013 even admitted by the US Treasury. So how does the first POMO schedule of 2014 look like? Well, as is by now well-known, the Fed will taper its monthly purchase of Treasury securities by $5 billion so instead of the old $45 billion per month, the NY Fed will “only” monetize $40 billion next month. However, since the reduction will be prorated across all POMO days, the old maxim still stands: shorting stocks on these POMO days can and likely will be hazardous for your health. Of note: no POMOs in the first week of the year until Monday January 6.


    



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

4 New Year’s Bans: Plastic Bags, Light Bulbs, and More!

The new year provides a perfect
time to turn a new leaf… whether you like it or not. Before
diving headfirst into 2014, you may want to exhaust all your
desires to put groceries in plastic bags, talk on the phone while
driving, use a tanning bed, question a convicted felon, or buy
incandescent light bulbs. At all different levels of government,
these activities and products are about to banned.

4. Los Angeles Bans Free Plastic Bags

Los Angeles is about to become the nation’s biggest city to ban
free plastic groceries bags.
According
to the Los Angeles Times, any business
caught violating the law will “face a fine of $100 after the first
violation, $200 after the second and $500 after the third. Fines
would be imposed for each day the violation continues.”

The crusade against plastic grocery bags is not exactly popular.
A Reason-Rupe poll conducted earlier this year
found
that “60 percent oppose a ban on plastic bags in all
grocery stores and other retailers in the city or town where they
live.”

Likewise, although the initiative enjoys large support from
environmentalists for ostensibly cutting down on waste. The
sentiment is nice, but ReasonTV suggests
this is just “feel-good legislation,” because plastic bags actually
have a negligible on the environment.

3. The Illinois Twofer: Phone Calls While Driving,
Minors from Using Tanning Beds

It’s about to be a long winter for image-conscious Illinois
teens. As of Wednesday, no one under the age of 18 will be allowed
to use a tanning bed, even with parental consent. A local ABC
affiliate reveals
how detrimental this will be to many small businesses in the state.
Pushing tanning salons to the brink cannot help Illinois, which
already bears high
unemployment
and
burdens
on businesses.

But that’s not all. Come New Year’s Day, talking on the phone
(unless it’s hands-free) while driving in will become a punishable
offense with a
$75 ticket
. Illinois joins a growing number of states with
similar prohibitions, despite murky evidence about their
effectiveness. Reason‘s Peter Suderman addresses
how laws banning cell phone use while driving have failed across
the board to reduce crashes. Likewise, former Reason
staffer Radley Balko highlights
research that indicates that bans “actually may prompt a slight
increase in road crashes.”

2. Rhode Island “Bans the Box”

Rhode Island will become the fourth state to “ban
the box
.” The law prohibits employers, whether public or
private, from inquiring about a potential employee’s criminal
background during the application process. They will have to wait
until interviewing an individual to ask. Law enforcement agencies
are exempt from the law,
according
to the Society for Human Resource Management.

This type of legislation is well-intentioned in its effort to
help reintegrate convicts into society, but it doesn’t address the
problem of harsh laws that imprison non-violent offenders. After
all, Department of Justice data
shows
that an increasing proportion of the roughly 1.5 million
individuals in state and federal prisons are behind bars for
non-violent crimes. Instead, Rhode Island is following a trend of
creating an even more complex set of laws that infringe on the
rights of business owners.

1. The Feds Black Out Incandescent Light
Bulbs

Not unlike Canada or the
People’s Republic of China
, our own federal government is
phasing out incandescent light bulbs. The
Energy Independence and Security Act of 2007
already killed off
100-watt and 75-watt bulbs, but 2014 will mark the end of 60-watt
and 40-watt bulbs.

The majority of Americans are in for a rude awakening about
this. Computer World
reports
that as many as 60 percent of consumers are unaware of
the ban. They will likely not realize its impact “until a few
months into the next year when those light bulbs are bought and not
replaced,”
explains
The Sentinel.

The Heritage Foundation
warns
of how serious of an impact this government overreach
will have. The feds not only used scare tactics to constrict
consumer choice and distort market forces, but have forced
“unnecessary job losses from traditional incandescent manufacturers
in the United States. After already closing factories in Kentucky
and Ohio, General Electric recently announced that it is closing
its major incandescent factory in Winchester, Virginia—a factory
that employed 200 people and the last major incandescent
manufacturing facility in the United States.”

from Hit & Run http://reason.com/blog/2013/12/30/4-new-years-bans-plastic-bags-tanning-be
via IFTTT

4 New Year's Bans: Plastic Bags, Light Bulbs, and More!

The new year provides a perfect
time to turn a new leaf… whether you like it or not. Before
diving headfirst into 2014, you may want to exhaust all your
desires to put groceries in plastic bags, talk on the phone while
driving, use a tanning bed, question a convicted felon, or buy
incandescent light bulbs. At all different levels of government,
these activities and products are about to banned.

4. Los Angeles Bans Free Plastic Bags

Los Angeles is about to become the nation’s biggest city to ban
free plastic groceries bags.
According
to the Los Angeles Times, any business
caught violating the law will “face a fine of $100 after the first
violation, $200 after the second and $500 after the third. Fines
would be imposed for each day the violation continues.”

The crusade against plastic grocery bags is not exactly popular.
A Reason-Rupe poll conducted earlier this year
found
that “60 percent oppose a ban on plastic bags in all
grocery stores and other retailers in the city or town where they
live.”

Likewise, although the initiative enjoys large support from
environmentalists for ostensibly cutting down on waste. The
sentiment is nice, but ReasonTV suggests
this is just “feel-good legislation,” because plastic bags actually
have a negligible on the environment.

3. The Illinois Twofer: Phone Calls While Driving,
Minors from Using Tanning Beds

It’s about to be a long winter for image-conscious Illinois
teens. As of Wednesday, no one under the age of 18 will be allowed
to use a tanning bed, even with parental consent. A local ABC
affiliate reveals
how detrimental this will be to many small businesses in the state.
Pushing tanning salons to the brink cannot help Illinois, which
already bears high
unemployment
and
burdens
on businesses.

But that’s not all. Come New Year’s Day, talking on the phone
(unless it’s hands-free) while driving in will become a punishable
offense with a
$75 ticket
. Illinois joins a growing number of states with
similar prohibitions, despite murky evidence about their
effectiveness. Reason‘s Peter Suderman addresses
how laws banning cell phone use while driving have failed across
the board to reduce crashes. Likewise, former Reason
staffer Radley Balko highlights
research that indicates that bans “actually may prompt a slight
increase in road crashes.”

2. Rhode Island “Bans the Box”

Rhode Island will become the fourth state to “ban
the box
.” The law prohibits employers, whether public or
private, from inquiring about a potential employee’s criminal
background during the application process. They will have to wait
until interviewing an individual to ask. Law enforcement agencies
are exempt from the law,
according
to the Society for Human Resource Management.

This type of legislation is well-intentioned in its effort to
help reintegrate convicts into society, but it doesn’t address the
problem of harsh laws that imprison non-violent offenders. After
all, Department of Justice data
shows
that an increasing proportion of the roughly 1.5 million
individuals in state and federal prisons are behind bars for
non-violent crimes. Instead, Rhode Island is following a trend of
creating an even more complex set of laws that infringe on the
rights of business owners.

1. The Feds Black Out Incandescent Light
Bulbs

Not unlike Canada or the
People’s Republic of China
, our own federal government is
phasing out incandescent light bulbs. The
Energy Independence and Security Act of 2007
already killed off
100-watt and 75-watt bulbs, but 2014 will mark the end of 60-watt
and 40-watt bulbs.

The majority of Americans are in for a rude awakening about
this. Computer World
reports
that as many as 60 percent of consumers are unaware of
the ban. They will likely not realize its impact “until a few
months into the next year when those light bulbs are bought and not
replaced,”
explains
The Sentinel.

The Heritage Foundation
warns
of how serious of an impact this government overreach
will have. The feds not only used scare tactics to constrict
consumer choice and distort market forces, but have forced
“unnecessary job losses from traditional incandescent manufacturers
in the United States. After already closing factories in Kentucky
and Ohio, General Electric recently announced that it is closing
its major incandescent factory in Winchester, Virginia—a factory
that employed 200 people and the last major incandescent
manufacturing facility in the United States.”

from Hit & Run http://reason.com/blog/2013/12/30/4-new-years-bans-plastic-bags-tanning-be
via IFTTT