Month: August 2014

Steven Greenhut Says Job Growth Is Good News, Tax Hikes Are Bad News

Most debates about tax policy suggest a
widespread understanding of Winston Churchill’s quip that “for a
nation to try to tax itself into prosperity is like a man standing
in a bucket and trying to lift himself up by the handle.” Even the
advocates for tax increases usually claim such hikes are needed to
pay for the level of government spending that they propose or that
higher taxes promote income equality, but they rarely doubt that
increasing the burden on job creators leads to fewer created jobs.
But following some welcome news showing a healthier, recovering
California economy, some economists and pundits are making the case
that Churchill has been debunked. They aren’t just saying that
recent tax increases haven’t been that bad for growth — but that
the taxes may sometimes be the cause of it. Steven Greenhut says
that even if it’s true (and it’s not), it’s not a particularly
moral argument.

View this article.

from Hit & Run http://ift.tt/1ljBa6x
via IFTTT

Judge Griesa Slams Argentina's "Misleading Statements"

Having been abused by almost every member of Argentina’s political body, Judge Griesa (presiding over the holdouts vs Argentina case) has come out swinging this morning. “What occurred this week did not extinguish or reuce the obligations of Argentina,” he began, exclaiming that “public statements [from Argentina] have been highly misleading – and has to be stopped.”

 

As Reuters reports,

JUDGE GRIESA SAYS IN VIEW OF WEEK’S EVENTS ON ARGENTINE DEFAULT, MEETING TO “CLARIFY WHERE WE GO FROM HERE”

 

JUDGE GRIESA: “WHAT OCCURRED THIS WEEK DID NOT EXTINGUISH OR REDUCE THE OBLIGATIONS OF THE REPUBLIC OF ARGENTINA“

 

JUDGE GRIESA: “THE REPUBLIC HAS ISSUED PUBLIC STATEMENTS THAT HAVE BEEN HIGHLY MISLEADING, AND THAT HAS TO BE STOPPED”

 

JUDGE GRIESA: “IN THE FIRST PLACE, HALF-TRUTHS ARE NOT THE SAME AS THE TRUTH”

 

JUDGE GRIESA: “I AM COUNTING ON THE REPUBLIC TO TAKE STEPS TO STOP THE MISLEADING INFORMATION BEING RELEASED BY THE REPUBLIC”

Objectivity?




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

Judge Griesa Slams Argentina’s “Misleading Statements”

Having been abused by almost every member of Argentina’s political body, Judge Griesa (presiding over the holdouts vs Argentina case) has come out swinging this morning. “What occurred this week did not extinguish or reuce the obligations of Argentina,” he began, exclaiming that “public statements [from Argentina] have been highly misleading – and has to be stopped.”

 

As Reuters reports,

JUDGE GRIESA SAYS IN VIEW OF WEEK’S EVENTS ON ARGENTINE DEFAULT, MEETING TO “CLARIFY WHERE WE GO FROM HERE”

 

JUDGE GRIESA: “WHAT OCCURRED THIS WEEK DID NOT EXTINGUISH OR REDUCE THE OBLIGATIONS OF THE REPUBLIC OF ARGENTINA“

 

JUDGE GRIESA: “THE REPUBLIC HAS ISSUED PUBLIC STATEMENTS THAT HAVE BEEN HIGHLY MISLEADING, AND THAT HAS TO BE STOPPED”

 

JUDGE GRIESA: “IN THE FIRST PLACE, HALF-TRUTHS ARE NOT THE SAME AS THE TRUTH”

 

JUDGE GRIESA: “I AM COUNTING ON THE REPUBLIC TO TAKE STEPS TO STOP THE MISLEADING INFORMATION BEING RELEASED BY THE REPUBLIC”

Objectivity?




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

Argentina Economy Minister: “Who believes in the rating agencies?”

shutterstock 92687836 Argentina Economy Minister: Who believes in the rating agencies?

August 1, 2014
Tallinn, Estonia

What a disaster.

For the second time in the last fifteen or so odd years, Argentina has defaulted on its debt. And as we reported a few weeks ago, there was no easy way out.

Years ago, most of the creditors that Argentina had stiffed in 2001 agreed on a settlement; they accepted a much lower payment than they were actually owed, figuring that getting -some- money back was better than nothing.

But a handful of bondholders, known collectively as the ‘holdouts’, didn’t take the deal.

These were the people who, you know, actually wanted to get paid what they are obliged to receive.

This is the basic equation of credit. One person lends money. The other person borrows money. In any reasonable deal, the lender is supposed to have some sort of recourse to recover his/her capital when the borrower defaults.

If you default on a mortgage, the bank takes the house. Stop making car payments and they send the repo guy to take your vehicle. When a business fails, bondholders can often liquidate the company’s assets.

Argentina has plenty of assets. The government has nationalized just about everything they can get their hands on, including the really despicable theft of a Spanish oil company’s assets.

Clearly this is a government that feels perfectly fine taking other people’s assets when it suits them. But they’re not willing for others to do the same.

So the holdouts sued.

Eventually they found a sympathetic judge in the United States who ordered Argentina to STOP making payments to all the other bondholders until the government could reach an agreement with the holdouts.

I know what you’re thinking– what gives some judge in the United States authority over a sovereign nation?

Nothing. Except that he threatened them with the kiss of death: if Argentina failed to comply with his instructions, he would banish them from the US banking system.

Now… imagine you’re the finance minister of some developing nation out there, watching this all unfold in the newspapers.

Would reading about all of this inspire more confidence in the US government? Would it make you want to continue relying on the US banking system? Use the dollar? Or even hold Treasuries?

Probably not.

The Argentina debacle is a lot of things. But one important lesson is that the rest of the world is watching very closely… and thinking, “No way do I want to end up like that.”

This is a HUGE reason why other countries are now starting to form their own international finance system. They’d rather rely on China and Russia than the Land of the Free.

And the US government is practically begging them all to run away like scalded dogs, further accelerating the decline of the US and the dollar’s dominance.

Argentina’s economic minister summed it up best from New York the other day when a reporter asked him about how a potential default would affect the rating agencies’ outlook on his country.

He said, “Who believes in the rating agencies?” After all, these were the guys who completely missed the 2008 financial crisis… who were slapping AAA ratings on toxic debt, and never accepted responsibility for it.

Why do they still have such a dominant role in the global financial system? And for that matter, why does the dollar?

Why indeed. And as the US keeps up this kind of behavior, it won’t for long.

from SOVEREIGN MAN http://ift.tt/1nbkA8L
via IFTTT

You Can't Stop the Dark Net (Yet Everyone Keeps Trying)

BBC News has been trawling the dark net
and discovering that drug offerings on the semi-hidden web
network have more than doubled since last fall. That’s when the FBI

closed down Silk Road, the original crypto bizaar, from which
dark netizens could purchase drugs and other illicit items
exclusively using Bitcoin. 

In October 2013, the Digital Citizens Alliance counted 18,174
deep
web drug listings that spanned four main markets. The BBC
News team now uncovered some 43,175 listings across 23 markets.

It seems when the FBI closed down Silk Road, all it managed to
do was splinter the deep web’s drug market while advertising to
more people that it existed in the first place. 

BBC News quotes the requisite people saying this is a “big
problem”, and not only because DRUGS. One dude worries about the
collateral damage that comes from people quietly conducting
business on a network there’s literally no way to accidently
access.

“We still think the internet can be a wonderful tool for
consumers and businesses, but we do worry good people and companies
get caught up in the web spun by criminals and rogue operators,”
said Adam Benson, deputy executive director of Digital Citizens
Alliance. 

“That will slowly erode the trust and confidence we have in the
internet.”

A representative of Britain’s National Crime Agency said it was
using “all and every tool and technique” possible to go after dark
net drug sellers, because they are not just dealing drugs but
“dealing in misery.” But an anonymous dark-net drug seller offered
another perspective: 

“To us the dark net is all about anonymity and freedom,” he
said.

I put it to him that he was still selling dangerous substances
and supporting organised crime.

“A street dealer could sell you anything without you knowing
what it is exactly,” he replied. “Because of the strong community
on the dark net, this almost never happens. And when it happens,
the vendor in question will lose all of his clients.”

He added that the online drugs trade showed no signs of
reducing. “I’ve seen the dark net market grow almost
exponentially.”

It will continue to grow, because—like
Uber, and AirBnB,
and MyRedbook.com—it makes things both
more convenient and more transparent for consumers. And similar
to the way websites allow sex workers to go indie and avoid pimps
and brothels, the dark web lets small-scale drug purveyors thrive
without being part of some organized criminal network. That also
gives consumers less need to buy from seedier elements. So the dark
net could actually help reduce drug-related crime, in
addition to making drug use safer. But prohibition for its own sake
is a hell of a drug for lawmakers and enforcers in the U.S. and
U.K.

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

You Can’t Stop the Dark Net (Yet Everyone Keeps Trying)

BBC News has been trawling the dark net
and discovering that drug offerings on the semi-hidden web
network have more than doubled since last fall. That’s when the FBI

closed down Silk Road, the original crypto bizaar, from which
dark netizens could purchase drugs and other illicit items
exclusively using Bitcoin. 

In October 2013, the Digital Citizens Alliance counted 18,174
deep
web drug listings that spanned four main markets. The BBC
News team now uncovered some 43,175 listings across 23 markets.

It seems when the FBI closed down Silk Road, all it managed to
do was splinter the deep web’s drug market while advertising to
more people that it existed in the first place. 

BBC News quotes the requisite people saying this is a “big
problem”, and not only because DRUGS. One dude worries about the
collateral damage that comes from people quietly conducting
business on a network there’s literally no way to accidently
access.

“We still think the internet can be a wonderful tool for
consumers and businesses, but we do worry good people and companies
get caught up in the web spun by criminals and rogue operators,”
said Adam Benson, deputy executive director of Digital Citizens
Alliance. 

“That will slowly erode the trust and confidence we have in the
internet.”

A representative of Britain’s National Crime Agency said it was
using “all and every tool and technique” possible to go after dark
net drug sellers, because they are not just dealing drugs but
“dealing in misery.” But an anonymous dark-net drug seller offered
another perspective: 

“To us the dark net is all about anonymity and freedom,” he
said.

I put it to him that he was still selling dangerous substances
and supporting organised crime.

“A street dealer could sell you anything without you knowing
what it is exactly,” he replied. “Because of the strong community
on the dark net, this almost never happens. And when it happens,
the vendor in question will lose all of his clients.”

He added that the online drugs trade showed no signs of
reducing. “I’ve seen the dark net market grow almost
exponentially.”

It will continue to grow, because—like
Uber, and AirBnB,
and MyRedbook.com—it makes things both
more convenient and more transparent for consumers. And similar
to the way websites allow sex workers to go indie and avoid pimps
and brothels, the dark web lets small-scale drug purveyors thrive
without being part of some organized criminal network. That also
gives consumers less need to buy from seedier elements. So the dark
net could actually help reduce drug-related crime, in
addition to making drug use safer. But prohibition for its own sake
is a hell of a drug for lawmakers and enforcers in the U.S. and
U.K.

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

Stocks Tumble To Lows As Post-Payrolls Exuberance Fades, 10Y Yield At 2.50%

For all the glad-handers who said “the market seems to like it” – how do you like it now? The kneejerk jump in stocks to green on the day after payrolls (miss), spending (meet), PMI (miss), UMich confidence (down), ISM (beat), and construction spending (big miss) noise sparked algos momentum is fading fast… Treasury yields are plunging (10Y < 2.5%) along with the USD Index – giving up the entire Fed move. Gold and Silver have jumped around 1%, oil is lower.

 

Well that didn’t last long…

 

Treasury yields are tumbling… having retraced the entire post-FOMC losses

 

As is the USD Index…

 

Charts: Bloomberg




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

Espirito Santo Stock Suspended After 40% Crash, "Pending Information"

Looks like it will be a busty weekend for European leaders calling the crisis over. Knife-catching ‘value’ investors have been torn asunder as Banco Espirito Santo’s stock crashed another 40% today to 12c and has now been suspended by Portugal’s securities regualtor.

  • *BANCO ESPIRITO SANTO SHARES SUSPENDED PENDING INFORMATION, CMVM SAYS

With Goldman bailing and the sovereign suggesting it is not willing to bailout, it appears – based on Sub debt’s collapse – that a bail-in burden-sharing solution is coming. When will Bill Miller scoop it up?

 

Sub debt pricing in a massive haircut…

 

As Bloomberg reports,

Portuguese securities regulator suspended Banco Espirito Santo shares from trading pending information about the lender, CMVM says in statement on website.

Coming this weekend?




via Zero Hedge http://ift.tt/1s9ZVY4 Tyler Durden

Espirito Santo Stock Suspended After 40% Crash, “Pending Information”

Looks like it will be a busty weekend for European leaders calling the crisis over. Knife-catching ‘value’ investors have been torn asunder as Banco Espirito Santo’s stock crashed another 40% today to 12c and has now been suspended by Portugal’s securities regualtor.

  • *BANCO ESPIRITO SANTO SHARES SUSPENDED PENDING INFORMATION, CMVM SAYS

With Goldman bailing and the sovereign suggesting it is not willing to bailout, it appears – based on Sub debt’s collapse – that a bail-in burden-sharing solution is coming. When will Bill Miller scoop it up?

 

Sub debt pricing in a massive haircut…

 

As Bloomberg reports,

Portuguese securities regulator suspended Banco Espirito Santo shares from trading pending information about the lender, CMVM says in statement on website.

Coming this weekend?




via Zero Hedge http://ift.tt/1s9ZVY4 Tyler Durden

How The Worst New Orders Number In 6 Months Became The Highest Of 2014

The Institute of Supply Management is no stranger when it comes to seasonal adjustment fiascos: recall that in June it took Stone McCarthy to tell a humiliated Bradly Holcombe that they had released the wrong data not once, but twice. Ever since then we have been particularly focused on the seasonal adjustment factor that ISM uses when fudging its unadjusted data – data which as a reminder is a survey which reflects a continuum and thus does not need to be seasonally adjusted, yet it is. This is precisely what we found that last month, when the ISM reported a 55.3 print driven by a 58.9 surge in New Orders we called bullshit on the data and found that the actual, unadjusted data was the weakest since January.

Today, we find more of the same, when we learn that while the headline ISM of 57.1, seemingly the highest since April 2011 and driven by the all important New Orders print of 63.4 which was the highest since December 2013, was really a figment of seasonal adjustment.

The table below shows how the ISM takes its unadjusted, actual data, based on respondents saying whether the data is “better”, “same” or “worse”, and applies a seasonal adjustment factor, getting the adjusted number.

The more observant will notice that the % of respondents saying New Orders are “Better” just dropped to the lowest number since January, or 29%. And since the actual NSA number is calculated by add half the “Same” respondents to the “Better”, what one gets is a New Orders number in July which was the same as June, and the lowest in 6 months.

To show what is really happening here is a chart of New Orders actual and adjusted. One is the lowest print since January. The other is the highest of 2014. Which one do you believe?

The bottom line is that the only reason why the New Orders and thus the ISM soared to the highest level in over three years, is due to that 0.907 seasonal adjustment factor.

So what does recent unadjusted data reveal if one looks at just the actual surveys for the top three key categories without the seasonal adjustment?

This:

Welcome to the seasonally-adjusted recovery, summer of 2014 edition.




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