another site
From the backlash against zero tolerance to
advances in 3D printing, in many ways 2013 was a good year for
freedom and the libertarian moment. Ed Krayewski and other Reason
staffers highlight some of the good news for freedom that came out
of the year that was 2013.
from Hit & Run http://reason.com/blog/2013/12/31/good-news-for-freedom-in-2013
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Earlier this week, in “Why The Turkish Government May Be The Casualty Of A $119 Billion PetroDollar Loophole” we said “dare to mess with the Petrodollar and the wrath of the US government will hunt you down… sooner or later.” Sure enough, after resulting in a Turkish government scandal, punishing its stock market and sending the Lira reeling, the blowback has reached Iran where billionaire Babak Zanjani was arrested yesterday on corruption charges, although in reality his chief transgression was allowing the Petrogold system to show that the Petrodollar is now longer irreplaceable.
Iran’s PressTV reported that the Monday arrest comes after 12 Iranian lawmakers accused Babak Zanjani of corruption, calling for an inquiry into his financial activities in a letter to the heads of the three branches of the Iranian government. “Experts say Babak Zanjani’s estimated net worth is around USD 13.8 billion. The corporate mogul, aged nearly 40, owns and operates many holdings and companies, including the UAE-based Sorinet group, Qeshm Airlines and Rah Ahan Football Club in Iran.” According to Head of Iran’s Supreme Audit Court Amin-Hossein Rahimi, Zanjani’s role in the course of transferring the country’s oil revenues involved breach of law.
“After sanctions were imposed against the National Iranian Oil Company, Iran had to export oil and they gave Babak Zanjani the task of exporting some of this oil worth around USD 3.0003 billion. The problem is that they were supposed to get collateral from him by law and this was not done. This is a violation,” Rahimi said in a press conference. Some other lawmakers believe Zanjani is part of a mafia that makes financial benefits out of the sanctions imposed against Iran. “Zanjani is not alone. There is a network of individuals. They are getting rich out of people’s misery caused by sanctions. There is corruption here,” said Iranian legislator Mohammad Reza Tabesh.
So, Zanjani was tasked to circumvent oil sanctions which he did for over a year, but now, for some inexplicable reason, he is arrested for not “getting collateral”?
Of course, that, however, is only half the story. For the full version we go to Turkey’s Cumhuriyet newspaper which last week explained the full extent of Zanjani’s “transgressions”, the bulk of which involved allowing Iran to avoid the Petrodollar and promoting Petrogold.
This is how the real story goes as explained by Bloomberg:
And seeing how Erdogan’s government is on the edge, and may fall any minute, that confidence appears misplaced, with the result being Zanjani’s arrest. What is unknown is whether his detention was merely Iran no longer needing his assistance to promote the usage of petrogold as a bypass of the petrodollar system now that the Iranian sanctions have been lifted. The only question we have is how much of Zanjani’s arrest was due to behind the scenes US influence making it clear that the Iranian detente will only take place – nuclear enrichment strawman forgotten – only if all those who made Petrogold possible are quitely put behind bars…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0c1sdoPPNPs/story01.htm Tyler Durden
Earlier this week, in “Why The Turkish Government May Be The Casualty Of A $119 Billion PetroDollar Loophole” we said “dare to mess with the Petrodollar and the wrath of the US government will hunt you down… sooner or later.” Sure enough, after resulting in a Turkish government scandal, punishing its stock market and sending the Lira reeling, the blowback has reached Iran where billionaire Babak Zanjani was arrested yesterday on corruption charges, although in reality his chief transgression was allowing the Petrogold system to show that the Petrodollar is now longer irreplaceable.
Iran’s PressTV reported that the Monday arrest comes after 12 Iranian lawmakers accused Babak Zanjani of corruption, calling for an inquiry into his financial activities in a letter to the heads of the three branches of the Iranian government. “Experts say Babak Zanjani’s estimated net worth is around USD 13.8 billion. The corporate mogul, aged nearly 40, owns and operates many holdings and companies, including the UAE-based Sorinet group, Qeshm Airlines and Rah Ahan Football Club in Iran.” According to Head of Iran’s Supreme Audit Court Amin-Hossein Rahimi, Zanjani’s role in the course of transferring the country’s oil revenues involved breach of law.
“After sanctions were imposed against the National Iranian Oil Company, Iran had to export oil and they gave Babak Zanjani the task of exporting some of this oil worth around USD 3.0003 billion. The problem is that they were supposed to get collateral from him by law and this was not done. This is a violation,” Rahimi said in a press conference. Some other lawmakers believe Zanjani is part of a mafia that makes financial benefits out of the sanctions imposed against Iran. “Zanjani is not alone. There is a network of individuals. They are getting rich out of people’s misery caused by sanctions. There is corruption here,” said Iranian legislator Mohammad Reza Tabesh.
So, Zanjani was tasked to circumvent oil sanctions which he did for over a year, but now, for some inexplicable reason, he is arrested for not “getting collateral”?
Of course, that, however, is only half the story. For the full version we go to Turkey’s Cumhuriyet newspaper which last week explained the full extent of Zanjani’s “transgressions”, the bulk of which involved allowing Iran to avoid the Petrodollar and promoting Petrogold.
This is how the real story goes as explained by Bloomberg:
And seeing how Erdogan’s government is on the edge, and may fall any minute, that confidence appears misplaced, with the result being Zanjani’s arrest. What is unknown is whether his detention was merely Iran no longer needing his assistance to promote the usage of petrogold as a bypass of the petrodollar system now that the Iranian sanctions have been lifted. The only question we have is how much of Zanjani’s arrest was due to behind the scenes US influence making it clear that the Iranian detente will only take place – nuclear enrichment strawman forgotten – only if all those who made Petrogold possible are quitely put behind bars…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0c1sdoPPNPs/story01.htm Tyler Durden
Moments ago the October Case Shiller home price index was released which came largely as expected: the seasonally adjusted number rose by 1.05% in the month, which despite the collapse in mortgage applications, shows that cash still rules everything, as average home prices across the Composite 20 cities increased at a 13.63% annual clip, the highest since February 2006. Both were a fraction higher than the expected 0.95% and 13.50% M/M and Y/Y increases. On the more relevant NSA basis (according to the authors) however, the October increase was 0.18%, the lowest since January and an indication that the institutional “all cash” buying wave is finally fading.
Indeed, as can be seen on the chart below, the actual home price gains over the past three months have plateaued and absent another major push in early 2014 facilitating Wall Street’s purchases of US real estate, it is very likely that this chart will once again resume trending lower.
And to show specifically just what the Case Shiller index tracks, here – once again – is an update on the housing market of bankrupt Detroit. In October prices rose 0.9% for the 8th consecutive monthly increase, and rose 17.3% from a year earlier. All is obviously well.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/nUm6ze1byTc/story01.htm Tyler Durden
December 31, 2013
Sovereign Valley Farm, Chile
The other night I played my first game of Monopoly in probably 20 years.
One of my friends gave me the infamous board game for Christmas, and as I’ve had a lot of guests down here over the last few days, we all thought we’d give it a go.
Guess who won? Nope. Not me. And not any of my friends either. The bank won.
The bank actually wins every game of Monopoly.
Think about it. All of the properties are initially purchased from the bank. You mortgage them back at half the market value. Plus the bank has its own Monopoly on lending… the official rules state that only the bank can loan money to players.
Most importantly, though, the bank never goes bankrupt. Ever. If the bank runs out of that Monopoly funny money, the bank can merely create more money using anything (other paper) it sees fit.
Just like real life. And this tells you pretty much everything you need to know about money and banking.
from SOVErEIGN MAN http://www.sovereignman.com/finance/this-pretty-much-tells-you-everything-you-need-to-know-about-money-and-banking-13338/
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As the US session starts, despite a dearth of news and actvity in other markets, the precious metals complex is being smashed lower (on heavy volume). Gold just hit 2013 lows at $1182 and Silver at $18.837 is near its 2013 lows also.
It seems someone wants the status-quo-defying precious metals going out at their lows as central-planning-supporting stocks go out at their highs…
on heavy volume…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/I_5u0ThUs04/story01.htm Tyler Durden
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Submitted by Charles Hugh-Smith of OfTwoMinds blog,
If the gambler has no feedback from his bets because the casino reimburses his losses, then he will continue gambling wildly and losing spectacularly.
Risk is an ever-present characteristic of life; it cannot be eliminated, it can only be masked or hedged. We know this intuitively, yet we blithely accept official assurances that risk can be eliminated by the monetary machinations of the Federal Reserve, the Central Bank of China, the Bank of Japan and the European Central Bank.
To confuse masking risk with the elimination of risk is the acme of hubris and the perfect setup for disaster. In my view, the global central bank response has been directed at masking risk and presenting this as the "solution" that has sent risk back to its lair, defeated. But cloaking risk does not eliminate it; official obfuscation merely pushes risk beneath the surface where it accumulates unseen.
Once the built-up risk reaches criticality, it explodes in "unforeseen" volatility that is often triggered by a seemingly unimportant event.
One way that risk is systemically and deliberately hidden is by separating it from the gain or loss that results from taking the risk. This is also called "moral hazard," and the example everyone now knows is private banks that "privatized profits and socialized losses" by keeping their outsized profits skimmed in the go-go years and transferring their staggering losses to the public ledger.
From the point of view of risk analysis, the risk of losses from malinvestment and speculation were separated from the gains. The banks kept the gains but then diverted the losses (risk) to the taxpayers via the $14 trillion TARP bailout and $16 trillion in "secret" subsidies and give-aways only revealed by a FOIA release of 30,000 pages won by Bloomberg.
We can understand this disconnect as the severing of the feedback loop from risk to gain. If the gambler has no feedback from his bets because the casino reimburses his losses, then he will continue gambling wildly and losing spectaularly. After all, why not?
This explains why the Fed and the Obama administration will not just fail, but fail spectacularly: not only are they individually distant from the risks incurred by their policies, those entities they are protecting (the banking sector, the higher education cartel, sickcare, etc.) are also protected from risk.
Without feedback (we might also call it the possibility of loss or defeat), the players and the system are both intrinsically doomed to failure. There is no other end-state possible if you start from this initial condition.
Thanks to globe-trotting correspondent Toby B., who sent me the book and several other fascinating histories, I have read a deeply insightful history of the pivotal battle of Midway, June 1942: Shattered Sword: The Untold Story of the Battle of Midway.
The book is unique among war histories in that it explores the culture and internal conflicts of the Japanese Imperial Navy which contributed (as initial conditions) to the unexpected defeat at Midway by the inferior forces of the American Navy.
Having studied Japanese history, language, geography and literature in university, the culture of the Imperial Navy was not entirely new ground. But the internal conflicts over differing strategies in the Japanese central command and Imperial Navy were new and of great interest, for they reflected not just Japanese culture but (not unexpectedly) human nature.
Japan's remarkably decisive successes in the first months of the Pacific war left the high command with the unusual problem of "what do we do next?" Having achieved all their tactical goals, debates raged over what to attempt next.
Admiral Yamamoto, the chief architect (though by no means uncontested) of Japan's strategy, opted to draw out America's aircraft carriers into a "decisive battle"–the heart of Japanese Naval doctrine. He devised the Midway campaign to do exactly this.
After such an amazing string of victories over the American, Dutch and British navies following Pearl Harbor, the idea of defeat did not enter the computations or the debates, nor did the idea that all the various strategies proposed were highly risky.
The denial and disorientation caused by the catastrophic loss of Japan's four finest aircraft carriers in a single day did not deter the Japanese commanders from pressing on to Midway; their mindset did not allow for defeat, and so they had no choice but to press on to victory.
Eventually Admiral Yamamoto conceded the campaign had failed to reach its objectives–destroy the U.S. aircraft carriers and capture Midway Island, and that pressing on would only endanger what was left of the Japanese fleet.
All of this struck me as absolutely telling in regards to the Fed's campaign to restart the U.S. economy by lowering interest rates to zero and flooding the system with free, cheap money (liquidity). The strategy is simple: drive the cost of borrowing money so low that people will once again buy homes with 3% down payments and huge mortgages, and plow their money into the stock market, the asset class (along with real estate) which is inflated monthly as an official Fed policy.
This is the Fed's strategy: drive "risk assets" like stocks up until some magical point is reached and households feel wealthy and confident again, and start borrowing and spending with abandon. The fact that only 10% of U.S. households own enough stock to expereince this "wealth effect" simply doesn't register in the Fed's mindset: risk has been eliminated and thus victory is assured.
The idea that this strategy is flawed does not occur to the Fed leadership; this mindset is so narrow and atrophied that the Fed has no alternative but to "press on to victory," even as the ship is sinking beneath them.
The same can be said of President Obama, who appears unable to grasp that his policies have been catastrophically misguided.
I suspect
2014 will be the year–after five long years of the same battle plan–that the total and complete failure of this strategy will be revealed to all. The Fed and Obama administration are steaming their flagships toward the booming guns on the horizon, confident of victory even as the undetected squadrons of risk are high above, setting their bombsites on the foaming white wakes of hubris below.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GZrtDzkht54/story01.htm Tyler Durden
What can one say but: “because of the recovery?”
As Italy’s ISTAT reported yesterday, poverty in Italy has reached its highest level in at least 16 years “as the economic crisis has bitten, driving up unemployment and cutting wages, according to a report on social cohesion issued on Monday. Relative poverty, defined as a family of two living on a monthly income of 991 euros (847.61 pounds) or less, affected 12.7 percent of families, the highest level recorded since the current series of data began in 1997, the report by statistics agency ISTAT said.”
It was immediately unclear if this beat expectations of a 13% print, and thus was bullish for the Stalingrad and Propaganda 500.
The report, a compendium of data on issues ranging from employment to demographics, said poverty had deepened in all areas of Italy between 2011 and 2012. Relative poverty rose from 4.9 percent to 6.2 percent in the richer north and from 23.3 percent to 26.2 percent in the poorer south.
More from Reuters:
The report painted a grim picture of the impact of the country’s worst post-war recession, with joblessness at record levels, incomes squeezed and permanent, full-time employment declining. “As one of the countries most affected by the crisis, Italy registered a progressive decline in the main macroeconomic and social indicators in 2012,” Labour Minister and former ISTAT chief Enrico Giovannini said in the introduction to the report.
“Nonetheless social cohesion has held up, enabling the country to support sacrifices aimed at recovering financial stability and passing important reforms,” he said.
Well as long as “social cohesion” has held up, i.e., no civil war has broken out yet, all is well. Then again, some disagree:
The relatively optimistic tone contrasted sharply with recent comments from employers’ federation Confindustria, which warned this month that the recession had inflicted damage on the Italian economy comparable to that left by a war.
The hardships caused by unemployment and measures taken to keep straining public finances under control have fed mounting discontent, typified by a long series of occasionally violent street protests earlier this month.
Unemployment in Italy is at its highest level since at least the late 1970s with the overall jobless rate at 12.5 percent and youth unemployment as high as 41.2 percent in October, according to the latest ISTAT figures.
With recoveries like these, who needs depress… hey – look over there, the FTSE MIB is up 20% for 2013!
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/r9CpAiT7Y-M/story01.htm Tyler Durden
Overnight Media Digest
WSJ
* In the best year for U.S. stocks since 1995, the smart way to play the markets has been to follow the dumb money.
* Private-equity firms are set to return a record amount of cash to their investors for 2013, after taking advantage of buoyant markets to sell hundreds of billions of dollars of investments.
* Regulators are set to unleash new business rules in 2014 that will push companies to re-examine issues ranging from their taxes and suppliers to auditor relationships and interest-rate hedges.
* Cooper Tire terminated its $2.2 billion merger pact with Indian suitor Apollo Tyres, ending a deal that had unraveled in recent months.
* Prices have tumbled 20 percent this year, capping the biggest two-year plunge in a decade and highlighting commodity markets’ struggle with a supply deluge.
* A feud between Apple and a lawyer appointed by a federal court judge to monitor the company’s e-book pricing reform is getting more acrimonious.
* Hertz Global Holdings Inc enacted a one-year shareholder-rights plan to prevent investors from gaining sizable control of the car-rental firm, a move the company attributed to “unusual and substantial” trading activity.
* Hewlett-Packard Co on Monday said it is in advanced talks with two U.S. regulators to settle investigations concerning allegations of bribery.
FT
Paul Tucker, former deputy governor for financial stability at the Bank of England, is knighted in the new year’s honours list for his services to central banking.
The UK’s financial markets watchdog is on track to receive a record number of pleas for help from overseas authorities in 2013 as cross-border scandals such as Libor-rigging underscore the global nature of regulatory investigations.
The heads of Britain’s electricity networks will be grilled by MPs in the new year amid rising anger over the amount of time it has taken to restore power to tens of thousands of homes affected by last week’s storms.
Local government debt levels in China have soared to almost $3 trillion in less than three years, according to an official audit highlighting one of Beijing’s most daunting challenges as it attempts to sustain economic growth while avoiding a financial crisis.
London Underground is throwing its stations open to greater commercial development as part of an overhaul of the world’s oldest metro system designed to boost the network’s takings.
NYT
* Despite challenges that have stymied even giants like Wal-Mart Stores Inc, some American technology entrepreneurs are seeking to pursue India’s untapped opportunities, and are ready to risk their money on start-ups.
* Banks in 16 countries are using a psychometric test to predict whether someone will pay back a loan. Originally a Harvard doctoral project, the Entrepreneurial Finance Lab’s test has increasingly won the confidence of risk-averse bankers in places where, many economists believe, credit bottlenecks are severely stunting growth. A new partnership with MasterCard Inc has potential to speed the model’s proliferation.
* Parents and advocacy groups have been using websites and social media as powerful megaphones to force titans of the food industry to reconsider the ingredients in their foods and the labeling and processing of their products. In several instances in the last year or so, major food companies and fast-food chains have shifted to coloring derived from spices or other plant-based sources, or changed or omitted certain labels from packaging.
* The number of Americans who signed contracts to buy existing homes in November was nearly unchanged from October, suggesting sales are stabilizing after several months of declines.
* Hertz Global Holding LLC, one of America’s biggest car rental companies, has adopted a one-year shareholder rights plan, commonly known as “poison pill,” to thwart an investor from gaining control of the board.
* Private equity firm Bain Capital said it had agreed to buy a majority stake in Bob’s Discount Furniture, the chain of stores known for its low-tech commercials featuring its founder, Bob Kaufman.
* The restaurant chain Cracker Barrel Old Country Store Inc’s board fired back at Sardar Biglari, the activist investor, on Monday, saying that it plans to continue business as is despite Biglari’s push to put Cracker Barrel on the block.
Canada
THE GLOBE AND MAIL
* Support for Prime Minister Stephen Harper’s government is dropping sharply, according to a new poll showing a majority of Canadians believe the country is headed in the wrong direction.
* The world’s central banks are stashing away Canadian dollars at a faster rate than any other major currency, a vote of confidence at a time when the loonie, the Canadian one dollar coin, has lost some of its shine in foreign exchange markets.
* Canada’s first gold coins had barely been minted before Ottawa yanked them out of circulation a hundred years ago in an effort to stop gold from leaving the country during the First World War. After a century of sitting in cloth bags inside the Bank of Canada
vault, they are among a wide range of assets the Conservative government is liquidating – in this case literally – to save taxpayers a few dollars and help balance the books.
* Toronto City Council will debate asking the Ontario government to help pay for cleanup after an ice storm that left hundreds of thousands of people without power, a bill that may ultimately be shared by Ottawa if costs rise.
Reports in the business section:
* BlackBerry Ltd Chief Executive John Chen continues to swat at critics and competitors, issuing an open letter that takes some direct shots at the company’s rivals as he tries to convince the market the smartphone company can turn itself around.
* Canadian Imperial Bank of Commerce signed a new deal with the Greater Toronto Airports Authority earlier this month, becoming the only bank allowed to advertise in Toronto’s Lester B. Pearson International Airport. Canadian banks are developing new tactics to attract business from immigrants, devoting greater effort to locking down newcomers even before they settle in their new country.
* Bombardier Inc says it received a firm order for 10 Challenger 350 business jets worth $259 million at list price. The Montreal-based plane and train maker did not disclose the customer’s name.
* The province of Ontario has experienced a rash of plant closings recently, and with a lacking currency cost advantage, new investment doesn’t seem to be in the cards.
NATIONAL POST
* Alberta’s opposition leader, Danielle Smith, says she is determined to win the legislature come 2016 against a government posting unbalanced budgets amid a series of petty scandals and outrages.
* Ontario Premier Kathleen Wynne says her vow to set up an Ontario pension plan is no bluff to twist Ottawa’s arm on enhancing the Canada Pension Plan (CPP). She says she’ll forge ahead because the federal government has shut down any discussion about CPP to provide Canadians with a more secure retirement income.
FINANCIAL POST
* Kitsault Energy Ltd has applied to federal regulators to export 20 million tons of chilled natural gas per year from the site of an abandoned mining town on Canada’s West Coast, joining much bigger companies looking to tap British Columbia shale gas for delivery to overseas markets.
* Two directors, Douglas Reeson and Greg Hall, have resigned from Colossus Minerals Inc, a formerly high-flying junior mining company that is now on the verge of financial collapse.
* Canadians may be the heaviest Internet users in the world but their homegrown online retailers have yet to catch up to the performance of U.S. stores with sites in Canada, according to a report by Vancouver-based digital consultancy Chasm Digital Inc.
China
CHINA SECURITIES JOURNAL
– China’s Ministry of Land and Resources is drafting rules to ensure the supply of arable land. China must improve land efficiency to meet a level of at least 120 million hectares for agriculture, ministry vice minister Wang Shiyuan said.
– The scale of China’s outward direct investment is estimated to reach $90 billion this year, said Wang Yiming, a vice president of macroeconomic research under the National Development and Reform Commission (NDRC).
SHANGHAI SECURITIES NEWS
– China will implement five institutional and five functional changes in the Shanghai Free Trade Zone (FTZ) next year, including setting up a separate accounting unit and establishing markets for bulk products, sources told the official paper.
SHANGHAI DAILY
– Authorities in Shanghai have blacklisted 29 hospitals for failing to implement tougher smoking rules as China cracks down on public smoking. The move follows a ban in China on officials smoking in public places.
CHINA DAILY
– China’s urban smog reached a 52-year high in 2013, according to the National Meteorological Center. Cities suffered on average 29.9 days of smog over the course of the year.
PEOPLE’S DAILY
– Revealing China’s government debt to the public will help make the government’s economic work more transparent, so improving debt management and supervision, said a commentary in the paper that acts as the Party’s mouthpiece.
Fly On The Wall 7:00 AM Market Snapshot
ANALYST RESEARCH
Haemonetics (HAE) downgraded to Hold from Buy at Benchmark Co.
Blucora (BCOR) initiated with a Hold at Jefferies
Ring Energy (REI) initiated with a Buy at SunTrust
Hertz (HTZ) potential spin-off could spur investor interest, says Wells Fargo
ITT Educational (ESI) CFPB settlement risk manageable, says William Blair
Penn National (PENN) Q4 revenue estimate cut to $651M at FBR Capital
HOT STOCKS
NASDAQ (NDAQ), Borsa Instanbul signed agreement; NASDAQ to take 5% equity stake
Berkshire Hathaway (BRK.A) acquired flow improver business from Phillips 66 (PSX)
Hertz Global (HTZ) board unanimously adopted one-year shareholder rights plan
Maui Land & Pineapple (MLP) doesn’t comment on unusual market activity
Safeguard Scientifics (SFE) partner company ThingWorx acquired by PTC (PTC) for $112M
NEWSPAPERS/WEBSITES
SYNDICATE
Air Methods (AIRM) files automatic mixed securities shelf
ACTIVIST/PASSIVE FILINGS
KKR reports 6.8% stake in Marvell (MRVL), says may talk to management
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rTMtFTc8KXQ/story01.htm Tyler Durden