Month: July 2014

Silent Defiance: Kid Wears ‘RIP Eric Garner’ Shirt, Dunks Over Cop Car

You’ve
probably heard about the
tragic case of Eric Garner: On July 17, New York City Police
officers tackled, asphyxiated, and killed the 56-year-old father of
six with chokehold. He was allegedly selling untaxed cigarettes.
The NYPD has been getting some backlash for its heavy-handed

“broken window” policing, and this weekend Garner’s widow led a

rally in opposition to police brutality, which has particularly
affected the
black community. Amid the NYPD’s damage control effort, one
young man staged a sort of protest of his own against the
police.

During an annual basketball tournament on Friday in Staten
Island, a “patrol car rolled into the park across the street” from
the court, leaving “players and spectators fear[ing] police had
arrived to break up the game.” This was part of the setup,
explains SILive.com. “The cop parked the car just in front of
the hoop” and 20-year-old Brian Hogan-Gary leapt over the hood and
executed a clean slam dunk. As planned, the cop car’s sirens went
off. The crowd went wild.

Although Joel Soto, the organizer of the tournament, cleared the
stunt with the department beforehand, what appears to have been
unplanned was Hogan-Gary’s attire: just before taking the
shot, he pulled off his jersey and revealed a shirt that read
“R.I.P. ERIC GARNER” on the front and “JUSTICE” on the
back. 

According to SILive.com, Garner’s sons are part of the
basketball league that stages the tournament, but they weren’t
present.

It may have been a small, silent act, but it takes some brass to
pull that one over the NYPD. Does the fact that it happened during
a cop-approved event lessen Hogan-Gary’s chutzpah? I’d argue not.
Rather, it seems like it underscores his wit – kind of like when
the NYPD ran a Twitter campaign to boost its image, only to be
flooded with countless passive-aggressive replies in the form of

photos of cops kicking the crap out of people. The police try
to put on a kinder, gentler façade, and people like Hogan-Gary keep
that picture in check.

Below is one angle of the shot. Click
here for another angle.

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Bonds & Peso Slide As Fernandez Slams Holdouts For "True Aggression Against Argentina"

With hours to go until Argentina's grace period runs out and default occurs, investors are less than frantically selling Argentine bonds and pesos. They are lower but do not appear in full panic mode as we presume investors cling to hope that Argentina folds and pays off the holdouts (though there has been no sign of that so far). ARG 2033 bonds are down 3 points to 81 and the black-market peso is modestly weaker at 13.0 (near its record lows). Argentine CDS tightened modestly (as BofA warns the facts surrounding Argentina’s bond payments continue to be unique and deciding if CDS are triggered could take longer than expected) but 1Y CDS are holding at 4600bps (equivalent) – a 52% probability of default. Paul singer continues to defend himself (and the holdouts) from claims they are "dangerous fundamentalists" hell-bent on making it impossible for foreign sovereigns to restructure their debts.

Bonds are dropping but not in panic mode yet as CDS are priced for around a 52% probability of default.

 

Argentine President Cristine Fernandez speaks:

  • *ARGENTINA HAS PAID DEBT ON TIME WITHOUT MARKET ACCESS:FERNANDEZ
  • *ARGENTINE DEBT-TO-GDP RATIO AMONG LOWEST IN WORLD: FERNANDEZ
  • *HOLDOUTS UNDERTAKING TRUE AGRESSION AGAINST ARGENTINA:FERNANDEZ
  • *FERNANDEZ SAYS JUDGE GRIESA HASN'T BEEN NEUTRAL IN BOND CASE
  • *ARGENTINA REITERATES WILL TO PAY 100% OF CREDITORS: FERNANDEZ
  • *FERNANDEZ SAYS HOLDOUTS SHOULD ACCEPT PREVIOUS SWAP TERMS

But Elliott's Paul Singer defends himself and the holdouts…

As of this writing, the U.S. Supreme Court’s final rulings on two cases pitting our subsidiary, NML Capital, against Argentina have generated more than 500 news articles. In addition to provoking an endless array of bad plays on the phrase, “Don’t cry for me, Argentina,” the flood of coverage has occasioned quite a bit of commentary about Elliott. According to some, we are a positive force in the markets, because “credit markets function better when the rule of law is upheld” (New York Times, June 26). According to others, we are “dangerous fundamentalists” hell-bent on making it impossible for foreign sovereigns to restructure their debts (Foreign Affairs, June 24).

 

Elliott does not seek such publicity. Obviously, our lives would be easier if the press cared less about this particular position and/or similar positions that attract attention. The Economist ran a piece rebutting the silly and hyperbolic claim that our case will encourage lots of other investors to follow our lead, dryly noting that “There are easier ways to make money.” We think most other investors would certainly agree. As we have noted, one of the reasons that we continue to see attractive opportunities, even in the current yield-hungry environment, is that complex, labor-intensive situations are not everyone’s cup of tea.

 

While many journalists and commentators often badly misunderstand what Elliott is all about, we understand that this publicity is occasionally the cost of adhering to our philosophy, which is to seek truly uncorrelated positions in which the key determinants of unlocking value are our own creativity and hard work. Once we are in these positions, we see them through and try to achieve the best return possible. That commitment is especially strong when we indisputably have the rule of law on our side.

 

More than once during the Argentina saga, we have been erroneously described as a fund that goes out of its way to seek out litigation. That description is false – litigation is uncertain, expensive, difficult and time-consuming. It is a last resort to which we only turn when a dispute becomes impossible to resolve through negotiations, as has been the case for many years with respect to Argentina due to the Argentine government’s refusal to negotiate with us. However, if we must litigate in the course of enforcing our contractual rights, then we will not shy away from it. And if publicity is also a part of that equation, then so be it.

The IMF just gave Argentina the kiss of death…

  • *IMF SEES NO BROAD CONSEQUENCES OF ARGENTINA POTENTIAL DEFAULT

As BofA warns this may not be simple

  • *DETERMINING ARGENTINE CDS CREDIT EVENT WOULD BE LENGTHY: BOFA
  • *DEFINING EVENT OF A DEFAULT FOR ARGENTINA NOT CLEAR-CUT: BOFA

Determining whether Argentina’s failure to reach a settlement with holdout creditors tomorrow will trigger a default on bonds and credit-default swaps isn’t clear cut, according to Bank of America Corp.

“To make the determination on whether a default had occurred, a process that would normally take around a day, could take much longer,” Jane Brauer, a New York-based strategist at the bank, wrote. “We expect that Argentina will continue to claim that it paid in full and on time, even though it was fully aware, at the time of deposit, that the recipient trustee would likely hold the funds.”




via Zero Hedge http://ift.tt/UIRSVC Tyler Durden

Bonds & Peso Slide As Fernandez Slams Holdouts For “True Aggression Against Argentina”

With hours to go until Argentina's grace period runs out and default occurs, investors are less than frantically selling Argentine bonds and pesos. They are lower but do not appear in full panic mode as we presume investors cling to hope that Argentina folds and pays off the holdouts (though there has been no sign of that so far). ARG 2033 bonds are down 3 points to 81 and the black-market peso is modestly weaker at 13.0 (near its record lows). Argentine CDS tightened modestly (as BofA warns the facts surrounding Argentina’s bond payments continue to be unique and deciding if CDS are triggered could take longer than expected) but 1Y CDS are holding at 4600bps (equivalent) – a 52% probability of default. Paul singer continues to defend himself (and the holdouts) from claims they are "dangerous fundamentalists" hell-bent on making it impossible for foreign sovereigns to restructure their debts.

Bonds are dropping but not in panic mode yet as CDS are priced for around a 52% probability of default.

 

Argentine President Cristine Fernandez speaks:

  • *ARGENTINA HAS PAID DEBT ON TIME WITHOUT MARKET ACCESS:FERNANDEZ
  • *ARGENTINE DEBT-TO-GDP RATIO AMONG LOWEST IN WORLD: FERNANDEZ
  • *HOLDOUTS UNDERTAKING TRUE AGRESSION AGAINST ARGENTINA:FERNANDEZ
  • *FERNANDEZ SAYS JUDGE GRIESA HASN'T BEEN NEUTRAL IN BOND CASE
  • *ARGENTINA REITERATES WILL TO PAY 100% OF CREDITORS: FERNANDEZ
  • *FERNANDEZ SAYS HOLDOUTS SHOULD ACCEPT PREVIOUS SWAP TERMS

But Elliott's Paul Singer defends himself and the holdouts…

As of this writing, the U.S. Supreme Court’s final rulings on two cases pitting our subsidiary, NML Capital, against Argentina have generated more than 500 news articles. In addition to provoking an endless array of bad plays on the phrase, “Don’t cry for me, Argentina,” the flood of coverage has occasioned quite a bit of commentary about Elliott. According to some, we are a positive force in the markets, because “credit markets function better when the rule of law is upheld” (New York Times, June 26). According to others, we are “dangerous fundamentalists” hell-bent on making it impossible for foreign sovereigns to restructure their debts (Foreign Affairs, June 24).

 

Elliott does not seek such publicity. Obviously, our lives would be easier if the press cared less about this particular position and/or similar positions that attract attention. The Economist ran a piece rebutting the silly and hyperbolic claim that our case will encourage lots of other investors to follow our lead, dryly noting that “There are easier ways to make money.” We think most other investors would certainly agree. As we have noted, one of the reasons that we continue to see attractive opportunities, even in the current yield-hungry environment, is that complex, labor-intensive situations are not everyone’s cup of tea.

 

While many journalists and commentators often badly misunderstand what Elliott is all about, we understand that this publicity is occasionally the cost of adhering to our philosophy, which is to seek truly uncorrelated positions in which the key determinants of unlocking value are our own creativity and hard work. Once we are in these positions, we see them through and try to achieve the best return possible. That commitment is especially strong when we indisputably have the rule of law on our side.

 

More than once during the Argentina saga, we have been erroneously described as a fund that goes out of its way to seek out litigation. That description is false – litigation is uncertain, expensive, difficult and time-consuming. It is a last resort to which we only turn when a dispute becomes impossible to resolve through negotiations, as has been the case for many years with respect to Argentina due to the Argentine government’s refusal to negotiate with us. However, if we must litigate in the course of enforcing our contractual rights, then we will not shy away from it. And if publicity is also a part of that equation, then so be it.

The IMF just gave Argentina the kiss of death…

  • *IMF SEES NO BROAD CONSEQUENCES OF ARGENTINA POTENTIAL DEFAULT

As BofA warns this may not be simple

  • *DETERMINING ARGENTINE CDS CREDIT EVENT WOULD BE LENGTHY: BOFA
  • *DEFINING EVENT OF A DEFAULT FOR ARGENTINA NOT CLEAR-CUT: BOFA

Determining whether Argentina’s failure to reach a settlement with holdout creditors tomorrow will trigger a default on bonds and credit-default swaps isn’t clear cut, according to Bank of America Corp.

“To make the determination on whether a default had occurred, a process that would normally take around a day, could take much longer,” Jane Brauer, a New York-based strategist at the bank, wrote. “We expect that Argentina will continue to claim that it paid in full and on time, even though it was fully aware, at the time of deposit, that the recipient trustee would likely hold the funds.”




via Zero Hedge http://ift.tt/UIRSVC Tyler Durden

NY Regulator Demands Government Monitors "Inside" Barclays And Deutsche Bank

With the NY Fed already warning of “significant operational risk,” and former Fed officials proclaiming Deutsche Bank is “horribly under-capitalized,” along with Barclays ‘dark pool’ and gold manipulations, it is perhaps not a total surprise that, as WSJ reports, New York’s banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank and Barclays as part of an intensifying investigation into possible manipulation in the foreign-exchange market. These two banks were selected because they had the ‘greatest potential problems’ based on a preliminary investigation.

 

As WSJ reports,

New York’s banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank and Barclays as part of an intensifying investigation into possible manipulation in the foreign-exchange market, according to people familiar with the probe.

 

The state’s Department of Financial Services notified lawyers for the two European banks earlier this month that it wanted to install a monitor inside each firm, based on preliminary findings in the agency’s six-month currencies-market probe, these people said. Negotiations are continuing over the details of the monitors’ appointments, but New York investigators expect to reach an agreement soon.

 

The regulatory agency has selected Deutsche Bank and Barclays for extra scrutiny partly because the records it has collected so far from more than a dozen banks under its supervision point to the greatest potential problems at those two banks, the people said. Plus, Deutsche Bank and Barclays are among the dominant players in the vast foreign-exchange market, so investigators hope a close-up view into their businesses will help them observe other players and trading patterns, the people said.

 

A Barclays spokesman declined to comment; the U.K. bank previously has said it is cooperating with authorities. A Deutsche Bank spokesman said it is cooperating with investigators “and will take disciplinary action with regards to individuals if merited.”

 

…

 

Deutsche Bank and Barclays are among more than 10 banks that have fired or suspended dozens of senior executives, traders and others staff in connection with civil and criminal foreign-exchange probes in the U.S., U.K. and elsewhere.

 

…

 

The New York regulator envisions wide-ranging investigative roles for its monitors inside Deutsche Bank and Barclays, according to the people close to the probe. The monitors’ powers will include interviewing bank employees, clients and business partners, observing trading practices and compliance, and reviewing more records beyond what the banks already have supplied.

We are sure they will greeted on the floor with open arms…

*  *  *

And don’t forget the elephant in the room…

 

And Barclays headache…

 




via Zero Hedge http://ift.tt/1tX4LIc Tyler Durden

NY Regulator Demands Government Monitors “Inside” Barclays And Deutsche Bank

With the NY Fed already warning of “significant operational risk,” and former Fed officials proclaiming Deutsche Bank is “horribly under-capitalized,” along with Barclays ‘dark pool’ and gold manipulations, it is perhaps not a total surprise that, as WSJ reports, New York’s banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank and Barclays as part of an intensifying investigation into possible manipulation in the foreign-exchange market. These two banks were selected because they had the ‘greatest potential problems’ based on a preliminary investigation.

 

As WSJ reports,

New York’s banking regulator is pushing to install government monitors inside the U.S. offices of Deutsche Bank and Barclays as part of an intensifying investigation into possible manipulation in the foreign-exchange market, according to people familiar with the probe.

 

The state’s Department of Financial Services notified lawyers for the two European banks earlier this month that it wanted to install a monitor inside each firm, based on preliminary findings in the agency’s six-month currencies-market probe, these people said. Negotiations are continuing over the details of the monitors’ appointments, but New York investigators expect to reach an agreement soon.

 

The regulatory agency has selected Deutsche Bank and Barclays for extra scrutiny partly because the records it has collected so far from more than a dozen banks under its supervision point to the greatest potential problems at those two banks, the people said. Plus, Deutsche Bank and Barclays are among the dominant players in the vast foreign-exchange market, so investigators hope a close-up view into their businesses will help them observe other players and trading patterns, the people said.

 

A Barclays spokesman declined to comment; the U.K. bank previously has said it is cooperating with authorities. A Deutsche Bank spokesman said it is cooperating with investigators “and will take disciplinary action with regards to individuals if merited.”

 

…

 

Deutsche Bank and Barclays are among more than 10 banks that have fired or suspended dozens of senior executives, traders and others staff in connection with civil and criminal foreign-exchange probes in the U.S., U.K. and elsewhere.

 

…

 

The New York regulator envisions wide-ranging investigative roles for its monitors inside Deutsche Bank and Barclays, according to the people close to the probe. The monitors’ powers will include interviewing bank employees, clients and business partners, observing trading practices and compliance, and reviewing more records beyond what the banks already have supplied.

We are sure they will greeted on the floor with open arms…

*  *  *

And don’t forget the elephant in the room…

 

And Barclays headache…

 




via Zero Hedge http://ift.tt/1tX4LIc Tyler Durden

Is Campbell Brown Too 'Pretty' to File a Historic Lawsuit That Would Make It Easier to Fire Lousy Teachers in New York?

The nonprofit advocacy group, Partnership for Education Justice
(PEJ), just filed a lawsuit with the goal of making it easier
to remove lousy teachers in New York. The filing comes on the heels
of last month’s landmark Vergara decision, in which the
California Superior Court
struck down five statutues that protect teachers in the Golden
State from being fired.

The New York lawsuit seeks to overturn several local rules, such
as a requirement that teacher layoffs be carried out in order of
seniority, and a mandate that schools have to decide whether or not
to grant teachers tenure within their first three years on the job.
It’s also aimed at simplifying the process of firing a teacher,
which can take up to 18 months and cost Campbell Brown |||taxpayers $250,000, according
to the group.

Former CNN anchor Campbell Brown, who is the founder of PEJ,

announced the case yesterday on the steps of New York’s City
Hall. She was joined by Keoni Wright, one of seven plaintiffs, who
has a unique perspective on the issue: His twin daughters had
widely
disparate experiences with two teachers at a public school in
East New York.

I was curious to see how teachers unions and their defenders are
reacting to the lawsuit (which has been rumored for a while) and to
Brown’s new career as an education reformer. It’s ugly. Here are
some highlights:

  • “[Campbell Brown] is a good media figure because of her looks,
    but she doesn’t seem to know or understand anything about teaching
    and why tenure matters,” education activist and historian Diane
    Ravitch
    told     The Washington Post. “I know it sounds sexist to
    say that she is pretty, but that makes her telegenic, even if what
    she has to say is total nonsense.”
  • “[Campbell Brown] and her wealthy supporters seem to think that
    if teachers could be fired for any reason at any time, student
    achievement in high-poverty schools would miraculously
    soar,” union leader Karen Magee
    writes    , taking the utmost care not to hyperbolize or
    misrepresent the views of her opponents.
  • “It’s a good thing when professionals can’t simply be fired on
    a boss’s whim,”
    argues     Salon‘s Gabriel Arana. The piece makes a
    tortured case (even by Salon standards) that the quality
    of a teacher doesn’t affect student achievement all that much.
    And “figuring out who’s a good teacher is pretty difficult.”
  • “[Campbell Brown] failed to disclose…her husband, Dan Senor,
    sits on the board of the New York affiliate of StudentsFirst, an
    education lobbying group founded by Michelle Rhee,” wrote
    Mother Jones’ Andy Kroll last year in a piece headlined,
    “Who’s
    Really Behind Campbell Brown’s Sneaky Education Outfit.”     After
    revealing the horrifying news that Brown and her husband share
    interests, Kroll uncovered that her organization once patronized a
    media consulting firm with ties to Republicans. (More recently,
    Brown
    hired     Obama’s former press secretary, Robert Gibbs, to lead her
    PR campaign.)

  • Campbell Brown must be drinking from the “lucrative
    Republican-aligned corporate/billionaire-funded anti-union money
    fire hose,”
    theorized     Dave Johnson of the Campaign for America’s Future in
    response to an education op-ed Brown published in The Wall
    Street Journal    . If you can’t respond to an argument, promote a
    conspiracy theory!

The Washington Post forgot to ask Diane Ravitch if the
quite telegenic actor, Matt Damon, who she considers a 
“true
american hero,” gets invited to union rallies on the basis of
his deep
grasp of the issues.

Three years ago, when I asked Damon at one of those events if he
really believes all teachers are wonderful and if, say, 10% might
be underperformers who should be let go, Damon responded
(naturally) by suggesting that I was a shitty cameraman:

from Hit & Run http://ift.tt/1nZcPqX
via IFTTT

Is Campbell Brown Too ‘Pretty’ to File a Historic Lawsuit That Would Make It Easier to Fire Lousy Teachers in New York?

The nonprofit advocacy group, Partnership for Education Justice
(PEJ), just filed a lawsuit with the goal of making it easier
to remove lousy teachers in New York. The filing comes on the heels
of last month’s landmark Vergara decision, in which the
California Superior Court
struck down five statutues that protect teachers in the Golden
State from being fired.

The New York lawsuit seeks to overturn several local rules, such
as a requirement that teacher layoffs be carried out in order of
seniority, and a mandate that schools have to decide whether or not
to grant teachers tenure within their first three years on the job.
It’s also aimed at simplifying the process of firing a teacher,
which can take up to 18 months and cost Campbell Brown |||taxpayers $250,000, according
to the group.

Former CNN anchor Campbell Brown, who is the founder of PEJ,

announced the case yesterday on the steps of New York’s City
Hall. She was joined by Keoni Wright, one of seven plaintiffs, who
has a unique perspective on the issue: His twin daughters had
widely
disparate experiences with two teachers at a public school in
East New York.

I was curious to see how teachers unions and their defenders are
reacting to the lawsuit (which has been rumored for a while) and to
Brown’s new career as an education reformer. It’s ugly. Here are
some highlights:

  • “[Campbell Brown] is a good media figure because of her looks,
    but she doesn’t seem to know or understand anything about teaching
    and why tenure matters,” education activist and historian Diane
    Ravitch
    told     The Washington Post. “I know it sounds sexist to
    say that she is pretty, but that makes her telegenic, even if what
    she has to say is total nonsense.”
  • “[Campbell Brown] and her wealthy supporters seem to think that
    if teachers could be fired for any reason at any time, student
    achievement in high-poverty schools would miraculously
    soar,” union leader Karen Magee
    writes    , taking the utmost care not to hyperbolize or
    misrepresent the views of her opponents.
  • “It’s a good thing when professionals can’t simply be fired on
    a boss’s whim,”
    argues     Salon‘s Gabriel Arana. The piece makes a
    tortured case (even by Salon standards) that the quality
    of a teacher doesn’t affect student achievement all that much.
    And “figuring out who’s a good teacher is pretty difficult.”
  • “[Campbell Brown] failed to disclose…her husband, Dan Senor,
    sits on the board of the New York affiliate of StudentsFirst, an
    education lobbying group founded by Michelle Rhee,” wrote
    Mother Jones’ Andy Kroll last year in a piece headlined,
    “Who’s
    Really Behind Campbell Brown’s Sneaky Education Outfit.”     After
    revealing the horrifying news that Brown and her husband share
    interests, Kroll uncovered that her organization once patronized a
    media consulting firm with ties to Republicans. (More recently,
    Brown
    hired     Obama’s former press secretary, Robert Gibbs, to lead her
    PR campaign.)

  • Campbell Brown must be drinking from the “lucrative
    Republican-aligned corporate/billionaire-funded anti-union money
    fire hose,”
    theorized     Dave Johnson of the Campaign for America’s Future in
    response to an education op-ed Brown published in The Wall
    Street Journal    . If you can’t respond to an argument, promote a
    conspiracy theory!

The Washington Post forgot to ask Diane Ravitch if the
quite telegenic actor, Matt Damon, who she considers a 
“true
american hero,” gets invited to union rallies on the basis of
his deep
grasp of the issues.

Three years ago, when I asked Damon at one of those events if he
really believes all teachers are wonderful and if, say, 10% might
be underperformers who should be let go, Damon responded
(naturally) by suggesting that I was a shitty cameraman:

from Hit & Run http://ift.tt/1nZcPqX
via IFTTT

The "Most Significant Danger" According To Elliott's Paul Singer

While we have ‘joked’ about it in the past, Elliott Management’s Paul Singer believes “there is one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence“ – an electromagnetic pulse (EMP).

 

 

 

Not a laughing matter….

Exceprted from Elliott Management’s latest letter from Paul Singer,

EMP: THE MOST SIGNIFICANT DANGER

While these pages are typically overflowing with scary or depressing scenarios, there is one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence. Even nuclear war is a relatively localized issue, except in its most extreme form. And the threat from asteroids can (possibly) be mitigated.

The risks associated with electromagnetic pulse, or EMP, represent another story entirely. It can occur naturally, from solar storms that send “coronal mass ejections,” which are massive energetic bursts of solar wind, tens of millions of miles in a mere few hours. Or it can be artificial, produced by a high-altitude (at least 15 miles) explosion of relatively low-yield (even Hiroshima-strength) nuclear weapons.

Different initiators of EMP have different pulses and different effects. But the bottom line is that EMP fries electronic devices, including parts of electric grids. In 1859, a particularly strong solar disturbance (the “Carrington Event”) caused disruption to the nascent telegraph network. It happened again with similar disruptions in 1921, before our modern power grid came into existence. A NASA study concluded these events have typically occurred around once per century. A repeat of the Carrington Event today would cause a massive disruption to the electric grid, possibly shutting it down entirely for months or longer, with unimaginable consequences.

Only two years ago, the sun let loose with a Carrington-magnitude burst, but the position of the earth at the time prevented the burst from hitting it. The chances of additional events of such magnitude may be far greater than most people think.

The artificial version of EMP, a kind of nuclear attack, would require between one and three high-altitude nuclear explosions to create its effect across all of North America. It would not cause any blast or radiation damage, but such an attack would have consequences even more catastrophic than a severe solar storm. It could not only bring down the grid, but also lay down a very intense, very fast pulse across the continent, damaging or destroying electronic switches, devices, computers and transformers across America.

There is no way to stop a naturally occurring EMP, and nuclear proliferation, combined with advances in weapons delivery systems, make the artificial version a distinct possibility, so the dangers are very real.

What can be done about this risk? Critical elements of the power grid and essential electronic devices can be hardened. Spare parts can be stockpiled for other, less critical hardware. Procedures can be developed as part of emergency preparedness so that the relevant government agencies and emergency response NGOs are ready to respond quickly and effectively to an episode large or small.

Why are we writing about EMP? Because in any analysis of societal risk, EMP stands all by itself. Congressional committees are studying this problem, and federal legislation is laboriously working its way through the process. We think that raising people’s consciousness about what should be an effort by both parties to make the country (and the world) safer from this kind of event is a good thing to do.




via Zero Hedge http://ift.tt/1uE7R84 Tyler Durden

The “Most Significant Danger” According To Elliott’s Paul Singer

While we have ‘joked’ about it in the past, Elliott Management’s Paul Singer believes “there is one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence“ – an electromagnetic pulse (EMP).

 

 

 

Not a laughing matter….

Exceprted from Elliott Management’s latest letter from Paul Singer,

EMP: THE MOST SIGNIFICANT DANGER

While these pages are typically overflowing with scary or depressing scenarios, there is one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence. Even nuclear war is a relatively localized issue, except in its most extreme form. And the threat from asteroids can (possibly) be mitigated.

The risks associated with electromagnetic pulse, or EMP, represent another story entirely. It can occur naturally, from solar storms that send “coronal mass ejections,” which are massive energetic bursts of solar wind, tens of millions of miles in a mere few hours. Or it can be artificial, produced by a high-altitude (at least 15 miles) explosion of relatively low-yield (even Hiroshima-strength) nuclear weapons.

Different initiators of EMP have different pulses and different effects. But the bottom line is that EMP fries electronic devices, including parts of electric grids. In 1859, a particularly strong solar disturbance (the “Carrington Event”) caused disruption to the nascent telegraph network. It happened again with similar disruptions in 1921, before our modern power grid came into existence. A NASA study concluded these events have typically occurred around once per century. A repeat of the Carrington Event today would cause a massive disruption to the electric grid, possibly shutting it down entirely for months or longer, with unimaginable consequences.

Only two years ago, the sun let loose with a Carrington-magnitude burst, but the position of the earth at the time prevented the burst from hitting it. The chances of additional events of such magnitude may be far greater than most people think.

The artificial version of EMP, a kind of nuclear attack, would require between one and three high-altitude nuclear explosions to create its effect across all of North America. It would not cause any blast or radiation damage, but such an attack would have consequences even more catastrophic than a severe solar storm. It could not only bring down the grid, but also lay down a very intense, very fast pulse across the continent, damaging or destroying electronic switches, devices, computers and transformers across America.

There is no way to stop a naturally occurring EMP, and nuclear proliferation, combined with advances in weapons delivery systems, make the artificial version a distinct possibility, so the dangers are very real.

What can be done about this risk? Critical elements of the power grid and essential electronic devices can be hardened. Spare parts can be stockpiled for other, less critical hardware. Procedures can be developed as part of emergency preparedness so that the relevant government agencies and emergency response NGOs are ready to respond quickly and effectively to an episode large or small.

Why are we writing about EMP? Because in any analysis of societal risk, EMP stands all by itself. Congressional committees are studying this problem, and federal legislation is laboriously working its way through the process. We think that raising people’s consciousness about what should be an effort by both parties to make the country (and the world) safer from this kind of event is a good thing to do.




via Zero Hedge http://ift.tt/1uE7R84 Tyler Durden

Strong 5 Year Bond Auction Has Record Low Dealer Takedown, Directs Surge

If yesterday’s 2 Year bond auction was a snoozer, today’s 5 Year was anything but. First, the pricing was solid, and while the high yeild of 1.72 was the highest since May 2011, it stopped 1.2 bps through the 1.732% When Issued. The Bid to Cover was also solid, rising from 2.74 to 2.81, the highest since March and now appears to have decisively broken the downtrend in BTCs seen through the end of 2013. The most notable features of today’s auction however were the internals, where we saw the Direct takedown soar from 9.3% to 25.9%, the second highest on record and only lower than the 30.4% in December 2012. And while Indirects were again flat like in yesterday’s auction at 48.2%, it was the Dealers who had to make space, and the resulting Dealer allotment of 25.9% was far lower than the 38.2% in June, and the lowest in auction history.

So yet again: if many at the Fed are expecting 2%, 3% and even 5% Fed Funds rates in 2016, the 5 Year auction begs to differ, and either someone is very wrong or in the coming two years the curve will steepen so much the only debate will be whether it is a double dip recession or outright depression.


via Zero Hedge http://ift.tt/1tX2n4u Tyler Durden