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It’s all for play isn’t it when the French Minister of the Interior Manuel Valls summons the US Ambassador? It’s just for the newspeak and the media on the advice of his spin-doctor to swivel the French public around so much that they won’t know what’s hit them. The National Security Agency will hardly be quaking in its eavesdropping boots since they probably got wind of it long before Valls had even picked up the phone. Anyhow, what will come of it all. The NSA is hardly going to either back down or come clean, is it?

Revelations

The French newspaper Le Monde has published an article today in which it reveals that Edward Snowden has provided the proof that there was a massive-scale program carried out between December 2012 and January 2013in which not only suspected terrorists were being listened in on but also members of industry and politicians as well as the general public.

There were 70.3 million calls that were recorded during that period.

Apparently by simply dialing certain numbers the NSA was triggered and the calls were listened into. The codename of the operation was US-985D. It also covered text messages that were sent and not just voice communication.

USA

The US has declined to make a comment so far on this matter and has simply referred media to a statement that was issued by the NSA in June regarding the surveillance of foreign countries. It was restated today that the practices “are lawful and conducted under authorities widely known and discussed, and fully debated and authorized by Congress. Their purpose is to obtain foreign intelligence information, including information necessary to thwart terrorist and cyber-attacks against the United States and its allies”. So, the US has been listening in on French politicians to thwart terrorist attacks on those very same allies. Ah! Gotcha! It’s a homegrown version of terrorism yet again. It’s the French state that is pitching against itself in this story. Is that it?

Just as we thought that there was nothing more to come, Edward Snowden’s father returned after a visit to meet with his son to publically announce that there were more revelations. Snowden had been rather quiet for the past few months and rightly so. The media space was taken up with the trials and tribulations of the US shutdown. Now, it’s the best time for new impact.

France’s Reaction

Valls has also requested an explanation from Washington. But, what is happening is nothing more than the tentative vociferations by a country that will do nothing in the face of the USA. What happened last time when the NSA was revealed to have spied on the EU?

Hollande said “we would like an explanation…please” and Merkel said nothing more than “you can’t do that to your friends” or words to that effect. Nobody did much else in the EU as they were more preoccupied by their own state fallout from the sovereign debt-crisis than human rights. To boot, we all know that all countries are doing the self-same thing. Spying is as old as the hills and nearly as old as the other oldest profession. Wouldn’t do any good to shout too much, the people might just hear you leaders and they certainly wouldn’t want questions to be raised about their own eavesdropping on their very own citizens, would they?

Valls stated on Europe-1 Radio station: “Rules are obviously needed when it comes to new communication technologies, and that’s something that concerns every country. If a friendly country, an ally, spies on France or other European countries, then that is completely unacceptable”.

Mais oui, Mais oui, but what are you going to do about it Monsieur Valls? Is there going to be a duel at dawn after knocking back a good drop of claret? At one time Manuel Valls had stated that despite looking at a request for asylum for Edward Snowden he wouldn’t be in favor of it. Then, it really isn’t worth saying anything. Another example of newspeak?

39% of US citizens believe that Snowden is a traitor, while 35% believe him to be a patriot. It would be interesting to see just how many French people agree with those figures of a divided nation. I thought that Putin had granted asylum on the condition that Snowden would cease damaging the US. That has obviously been thrown out of the Siberian window, hasn’t it?

Well, no worries, Snowden is learning Russian and reading Dostoyevsky by all accounts. I wonder what he is leafing through right now? Is it Crime and Punishment or The Idiot?

Looks as if Dostoyevsky was made for Snowden anyhow…it could have been any of his books but maybe one has a more fitting title than any of the others: The Dream of a Ridiculous Man.

Originally posted: France Summons US Ambassador in Snowden Affair

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mbJI8LfZBZ4/story01.htm Pivotfarm

While Cramer exclaimed this morning that his 'cult' stocks were unstoppable, the MoMo names were crushed today (for no good reason) with NFLX, FB, P (late saved by AAPL), and TSLA all monkey-hammered (as rumors of a major option algo going pear-shaped spread). Meanwhile, the S&P rose for the 9th day of the last 10 and closed once again at another all-time high above another magical level – 1750. Markets keyed off the weakness in the jobs report (ignoring the construction spending beat) and ran in a Taper-off-related manner across all assets – USD was battered, Bond yields compressed, Gold and silver soared. Oil prices did not follow the pattern leaking to $97.60 (-3% on the week). Market internals today were very "glitchy" though… EURJPY was in charge once again but VIX remains bid (and higher on the day), and while credit rallied, it remains less exuberant than stocks.

 

The market was a mess today as clearly algos went nuts early on with indices soaring and the widely held momo names bashed (and AAPL's mini flash crash) suggesting someone was knocked out of their market-hedged longs…

 

From last week's lows… this is just unreal…broadly…

 

and in sectors…

 

Treasuries bid…

 

USD sold…

 

But EURJPY ran the world today…

 

Gold and silver in demand… (but oil not so much – not exactly "growthy")…

 

S, we wonder… the Fed did not Taper last time because EVERYONE was expecting it… This time around, not only are the bubbles bigger (stocks and credit), the market technicals worse (fails are up), data is just as nebulous (some bad, some good)… but this time EVERYONE expected No TAPER… are you ready for shOctTaper…

 

Some seem more worried than others… notice the rise in VIX at the open even as stocks surged higher…. and the top came when AAPL flash-crashed… very fishy

 

Charts: Bloomberg

Bonus Chart: NFLX is now losing out to Caracas as best performing idiocy of the year…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TsuztTx4KLI/story01.htm Tyler Durden

While Cramer exclaimed this morning that his 'cult' stocks were unstoppable, the MoMo names were crushed today (for no good reason) with NFLX, FB, P (late saved by AAPL), and TSLA all monkey-hammered (as rumors of a major option algo going pear-shaped spread). Meanwhile, the S&P rose for the 9th day of the last 10 and closed once again at another all-time high above another magical level – 1750. Markets keyed off the weakness in the jobs report (ignoring the construction spending beat) and ran in a Taper-off-related manner across all assets – USD was battered, Bond yields compressed, Gold and silver soared. Oil prices did not follow the pattern leaking to $97.60 (-3% on the week). Market internals today were very "glitchy" though… EURJPY was in charge once again but VIX remains bid (and higher on the day), and while credit rallied, it remains less exuberant than stocks.

 

The market was a mess today as clearly algos went nuts early on with indices soaring and the widely held momo names bashed (and AAPL's mini flash crash) suggesting someone was knocked out of their market-hedged longs…

 

From last week's lows… this is just unreal…broadly…

 

and in sectors…

 

Treasuries bid…

 

USD sold…

 

But EURJPY ran the world today…

 

Gold and silver in demand… (but oil not so much – not exactly "growthy")…

 

S, we wonder… the Fed did not Taper last time because EVERYONE was expecting it… This time around, not only are the bubbles bigger (stocks and credit), the market technicals worse (fails are up), data is just as nebulous (some bad, some good)… but this time EVERYONE expected No TAPER… are you ready for shOctTaper…

 

Some seem more worried than others… notice the rise in VIX at the open even as stocks surged higher…. and the top came when AAPL flash-crashed… very fishy

 

Charts: Bloomberg

Bonus Chart: NFLX is now losing out to Caracas as best performing idiocy of the year…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TsuztTx4KLI/story01.htm Tyler Durden

For the first time (in the 44 years of polling), the majority of Americans favor legalizing marijuana. As Gallup notes, from a low of 12% in favor in 1969, the latest poll shows a clear majority (58%) now believe the drug should be made legal.

Perhaps not so surprising, given the prospects for much of today’s youth (67% of 18 to 29 year olds in favor), Gallup adds that a sizable percentage of Americans (38%) this year admitted to having tried the drug, which may be a contributing factor to greater acceptance.

 

Those who identfied themselves as Democrats  were almost twice as ‘in favor’ of legalization as Republicans.

 

Via Gallup,

It has been a long path toward majority acceptance of marijuana over the past 44 years, but Americans’ support for legalization accelerated as the new millennium began. This acceptance of a substance that most people might have considered forbidden in the late 1960s and 1970s may be attributed to changing social mores and growing social acceptance. The increasing prevalence of medical marijuana as a socially acceptable way to alleviate symptoms of diseases such as arthritis, and as a way to mitigate side effects of chemotherapy, may have also contributed to Americans’ growing support.

 

Whatever the reasons for Americans’ greater acceptance of marijuana, it is likely that this momentum will spur further legalization efforts across the United States. Advocates of legalizing marijuana say taxing and regulating the drug could be financially beneficial to states and municipalities nationwide. But detractors such as law enforcement and substance abuse professionals have cited health risks including an increased heart rate, and respiratory and memory problems.

 

With Americans’ support for legalization quadrupling since 1969, and localities on the East Coast such as Portland, Maine, considering a symbolic referendum to legalize marijuana, it is clear that interest in this drug and these issues will remain elevated in the foreseeable future.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/uJsc02iBaM0/story01.htm Tyler Durden

It would appear that French-owned Fitch, following its rating-watch-negative shift on the US credit rating last week, has got a tap on the shoulder from the powers that be. As Hollande complains about Obama's espionage, Fitch has released a statement explaining how the USA can do whatever it wants and not be downgraded. With only the Chinese ratings agency "able" to openly comment on the creditworthiness of the USA, it is no surprise that Fitch gave itself an "out" on the basis of the USDollar's exorbitant previlege.

 

Via Fitch,

Fitch Ratings says in a new report that even for a sovereign with the strongest credit fundamentals, there will be a gross general government debt (GGGD)/GDP level above which Fitch believes its rating is no longer compatible with 'AAA'.

 

This is usually 80%-90%, but can be higher for sovereigns with exceptional financing flexibility, such as benchmark borrowers with reserve currency status. As we have highlighted before, for France, Germany and the UK, this threshold is currently 90%-100%, and for the US, it is currently 110%, provided debt is then placed on a firm downward path over the medium term.

 

Our 80%-90% threshold recognises that sovereigns with (otherwise) 'AAA' characteristics have high financing flexibility and debt tolerance. Nevertheless, such a high level of debt tends to persist and potentially limits the capacity to respond to future shocks. It can also have a negative impact on growth.

 

Fitch gives a 'AAA' rated sovereign some leeway in allowing a temporary rise in its GGGD/GDP ratio before a downgrade. This stickiness also works in the other direction. The ratio needs to be steadily declining before restoring 'AAA' status, if warranted by other credit factors. Debt dynamics would need to be resilient to shocks to ensure that the 80%-90% level is not breached again. This would imply a fall in the debt ratio (not just a projected fall) of around 10pp of GDP or more from the downgrade level and would likely take several years.

 

A larger fall in the debt ratio would likely be required to restore the 'AAA' if the associated shock that precipitated the sharp increase in the debt ratio and downgrade revealed or triggered other negative credit developments such as weakening in the fiscal policy framework or credibility, a worsening in the structure of government debt, deterioration in economic growth prospects or a weakening in political stability or governance.

 

The 2013 median GGGD/GDP ratio for 'AAA' rated sovereigns is 47%, compared with 42% for all Fitch-rated sovereigns. But other credit strengths are sufficient to outweigh the potential drag on the rating from public debt. They typically have debt denominated in their own currency and can issue at long maturity while low interest rates hold down service costs.

 

The trajectory of GGGD/GDP may, at a particular time, be the key driver of rating actions for 'AAA' or 'AA+' rated sovereigns. However, ratings reflect the strengths and weaknesses of many factors, not just public debt. Thus rating actions can bite at various GGGD/GDP ratios.

So there it is folks… because of the dollar's exorbitant privelege position of world reserve currency, Reinhart and Rogoff's 90% barrier is irrelevant… It seems that Fitch is measuring pure default risk and not a "default and recovery" measure…

Simply put, there ain't no stopping US now…

 

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

It would appear that French-owned Fitch, following its rating-watch-negative shift on the US credit rating last week, has got a tap on the shoulder from the powers that be. As Hollande complains about Obama's espionage, Fitch has released a statement explaining how the USA can do whatever it wants and not be downgraded. With only the Chinese ratings agency "able" to openly comment on the creditworthiness of the USA, it is no surprise that Fitch gave itself an "out" on the basis of the USDollar's exorbitant previlege.

 

Via Fitch,

Fitch Ratings says in a new report that even for a sovereign with the strongest credit fundamentals, there will be a gross general government debt (GGGD)/GDP level above which Fitch believes its rating is no longer compatible with 'AAA'.

 

This is usually 80%-90%, but can be higher for sovereigns with exceptional financing flexibility, such as benchmark borrowers with reserve currency status. As we have highlighted before, for France, Germany and the UK, this threshold is currently 90%-100%, and for the US, it is currently 110%, provided debt is then placed on a firm downward path over the medium term.

 

Our 80%-90% threshold recognises that sovereigns with (otherwise) 'AAA' characteristics have high financing flexibility and debt tolerance. Nevertheless, such a high level of debt tends to persist and potentially limits the capacity to respond to future shocks. It can also have a negative impact on growth.

 

Fitch gives a 'AAA' rated sovereign some leeway in allowing a temporary rise in its GGGD/GDP ratio before a downgrade. This stickiness also works in the other direction. The ratio needs to be steadily declining before restoring 'AAA' status, if warranted by other credit factors. Debt dynamics would need to be resilient to shocks to ensure that the 80%-90% level is not breached again. This would imply a fall in the debt ratio (not just a projected fall) of around 10pp of GDP or more from the downgrade level and would likely take several years.

 

A larger fall in the debt ratio would likely be required to restore the 'AAA' if the associated shock that precipitated the sharp increase in the debt ratio and downgrade revealed or triggered other negative credit developments such as weakening in the fiscal policy framework or credibility, a worsening in the structure of government debt, deterioration in economic growth prospects or a weakening in political stability or governance.

 

The 2013 median GGGD/GDP ratio for 'AAA' rated sovereigns is 47%, compared with 42% for all Fitch-rated sovereigns. But other credit strengths are sufficient to outweigh the potential drag on the rating from public debt. They typically have debt denominated in their own currency and can issue at long maturity while low interest rates hold down service costs.

 

The trajectory of GGGD/GDP may, at a particular time, be the key driver of rating actions for 'AAA' or 'AA+' rated sovereigns. However, ratings reflect the strengths and weaknesses of many factors, not just public debt. Thus rating actions can bite at various GGGD/GDP ratios.

So there it is folks… because of the dollar's exorbitant privelege position of world reserve currency, Reinhart and Rogoff's 90% barrier is irrelevant… It seems that Fitch is measuring pure default risk and not a "default and recovery" measure…

Simply put, there ain't no stopping US now…

 

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