Category: zerohedge

According to GMO’s Jeremy Grantham, the six most important asset bubbles in modern times are the following:

And some additional color from the legendary investor:

The six most important asset bubbles in modern times (in my opinion) are shown in Exhibit 1 and, as you can see, each of them qualifies on the 2-sigma definition, although the 1965-72 peak, known in the trade then as the “Nifty-Fifty” event, did so by a modest margin. This event fell short in providing the usual good examples of extreme investment craziness. Perhaps, though, the very definition of the Nifty Fifty as “one decision stocks” may have qualified it, with one extremely crazy theme substituting for many smaller ones, for “one decision stocks” were so named because you only had to make one decision: to buy. These stocks were generally believed then to be so superior that once bought they would be held for life. (Most, like Coca-Cola and Merck, stood the test of time well enough, but unfortunately several then unchallengeable examples like Eastman Kodak and Polaroid went the way of all flesh, or all film.)

 

There is one very important event that influenced our lives, financial and otherwise: 2008. The U.S. housing market leaped past 2-sigma all the way to 3.5-sigma (a 1 in 5,000-year event!). The U.S. equity market, though, was overshadowed by the then recent record bubble of 2000, although it still made it to a 2-sigma event on some definitions. But what was unique about 2008 was the near universality of its asset class overpricing: every equity market, almost all real estate markets (Japan and Germany abstained), and, of course, a fully-fledged bubble in oil and many other commodities. The GMO Quarterly of April 2007 (“It’s Everywhere, in Everything: The First Truly Global Bubble”) started out: “From Indian antiquities to Chinese modern art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips; its bubble time.”libaba’s platforms, the giant might start to grow more slowly.

 

So 2008, particularly if you can imagine adding real estate and commodities, was indeed a true global asset bubble, being the most extreme collective outlier in not just 30 years, but in at least the 88 years of our data and probably forever, given the much lower correlations of earlier times.

Yes, 2008 was bad but you ain’t seen nothing yet. Because with six down, everyone is now eagerly waiting for the lucky, and final, number seven. We are confident the Fed won’t make us wait too long.

via Zero Hedge http://ift.tt/1s0OijL Tyler Durden

Submitted by Michael Snyder of The American Dream blog,

Virtually everything that you do is being watched.  Do you drive a car?  Do you watch television?  Do you use a cell phone?  As you do any of those things, information about you is being recorded and tracked.  We live at a time when personal privacy is dying.  And it is not just governments that are doing this.  In fact, sometimes private companies are the biggest offenders.  It turns out that gathering information about all of us is very, very profitable.  And both government entities and private companies are going to continue to push the envelope when it comes to high tech surveillance until people start objecting to what they are trying to do.  If we continue down the path that we are currently on, it is inevitable that we will end up living in an extremely restrictive “Big Brother” police state where basically everything that we do is very closely watched, monitored, tracked and controlled.  And such a day may be much closer than you think.  The following are 10 examples of how “Big Brother” is steadily creeping into our daily lives…

#1 Our cars are rapidly being transformed into high tech “Big Brother” surveillance devices.  In fact, a push is being made to require all new vehicles to include very sophisticated black box recorders…

As if the government wasn’t already able to track our movements on the nation’s highways and byways by way of satellites, GPS devices, and real-time traffic cameras, government officials are now pushing to require that all new vehicles come installed with black box recorders and vehicle-to-vehicle (V2V) communications, ostensibly to help prevent crashes.

 

Yet strip away the glib Orwellian doublespeak, and what you will find is that these black boxes and V2V transmitters, which will not only track a variety of data, including speed, direction, location, the number of miles traveled, and seatbelt use, but will also transmit this data to other drivers, including the police, are little more than Trojan Horses, stealth attacks on our last shreds of privacy, sold to us as safety measures for the sake of the greater good, all the while poised to wreak havoc on our lives.

 

Black boxes and V2V transmitters are just the tip of the iceberg, though. The 2015 Corvette Stingray will be outfitted with a performance data recorder which “uses a camera mounted on the windshield and a global positioning receiver to record speed, gear selection and brake force,” but also provides a recording of the driver’s point of view as well as recording noises made inside the car. As journalist Jaclyn Trop reports for the New York Times, “Drivers can barely make a left turn, put on their seatbelts or push 80 miles an hour without their actions somehow, somewhere being tracked or recorded.” Indeed, as Jim Farley, Vice President of Marketing and Sales for Ford Motor Company all but admitted, corporations and government officials already have a pretty good sense of where you are at all times: “We know everyone who breaks the law, we know when you’re doing it. We have GPS in your car, so we know what you’re doing.”

#2 A new Michigan law will ban thousands of preppers and small farmers from owning farm animals.  What are they going to do next?  Ban us from growing our own food?

#3 Have you ever collected anything?  If so, the FBI might swoop in and grab your collection someday even if you have not committed a crime.  If you think that this sounds crazy, you should consider what happened to a man named Don Miller recently…

FBI agents Wednesday seized “thousands” of cultural artifacts, including American Indian items, from the private collection of a 91-year-old man who had acquired them over the past eight decades.

 

An FBI command vehicle and several tents were spotted at the property in rural Waldron, about 35 miles southeast of Indianapolis.

The FBI did not have any evidence that a crime had been committed prior to seizing the collection, and Mr. Miller has not been arrested or charged with any crime.  The FBI says that it is going to catalog the collection “to determine whether some of the items might be illegal to possess privately”…

The aim of the investigation is to determine what each artifact is, where it came from and how Miller obtained it, Jones said, to determine whether some of the items might be illegal to possess privately.

#4 A father of a 4-year-old girl has been told that he will no longer be allowed to send healthy homemade lunches with his daughter when she attends her pre-kindergarten program because they conflict with federal guidelines.

#5 Do you watch television?  Well, if you have a newer television there is a very good chance that your television is watching you as well…

In November, the British tech blogger Doctorbeet discovered that his new LG Smart TV was snooping on him. Every time he changed the channel, his activity was logged and transmitted unencrypted to LG. Doctorbeet checked the TV’s option screen and found that the setting “collection of watching info” was turned on by default. Being a techie, he turned it off, but it didn’t matter. The information continued to flow to the company anyway.

#6 A plan that is being proposed in Fairfax County, Virginia would ban “frequent and large gatherings at neighborhood homes“.  This would include parties, scout gatherings and home Bible studies.

#7 At a public school in Florida, a 12-year-old boy has been banned from reading the Bible during “free reading time”…

A Florida schoolteacher humiliated a 12-year-old boy in front of an entire class after she caught him reading the Bible during free reading time.

 

The teacher at Park Lakes Elementary School in Fort Lauderdale ordered Giovanni Rubeo to pick up the telephone on her desk and call his parents.

 

As the other students watched, the teacher left a terse message on the family’s answering machine.

 

“I noticed that he has a book—a religious book—in the classroom,” she said on the recording. “He’s not permitted to read those books in my classroom.”

#8 In the USSA, a young child cannot even build a tree fort with his friends without the threat of being confronted by the police state.  Just consider what happened to one little fifth-grade boy down in Georgia a few weeks ago…

A fifth-grader says he was terrified when a police officer pointed a gun at him and his friends while they built a tree fort.

 

Omari Grant, 11, said he and his friends often play in a wooded area behind his home and were building a fort when a neighbor in the next subdivision called police to complain about what the boys were doing.

But no one anticipated what Omari and his mother say happened next.

 

“I guess the release of tension was like, ‘Mom, he had a gun in my face, Mommy. Mommy, he had a gun in my face,’” said Janice Baptiste, Omari’s mother.

The officer reportedly used very filthy language as he pointed his gun at the boys, and he forced them to get out of the tree and lay down on the ground…

“I was thinking that I don’t want to be shot today, so I just listened to what they said,” Omari said.

 

Omari said the officer holding his gun also used foul language and made him and his friends lay down on the ground.

 

“I learned that they’re supposed to help you not make you feel scared to even come outside,” Omari said.

#9 People like to joke about “the eye in the sky”, but it is no joke.  Technology that was originally developed for “blanket surveillance” during the Iraq war is now returning home…

Persistent Surveillance Systems has developed a surveillance camera on steroids. When attached to small aircraft, the 192-megapixel cameras record the patterns of the planetary life they fly over for hours at a time.

 

According to the Washington Post, this will give the police and other customers a “time machine” they can simply rewind when they need it. Placed strategically at the highest points of any town or city, these cameras could provide the sort of blanket surveillance that’s hard to avoid. The inventor of the camera, a retired Air Force officer, helped create a similar system for the city of Fallujah, the site of two of the most violent battles of the U.S. occupation of Iraq. It’s just one example of how wartime surveillance technologies are returning home for “civilian use.”

#10 Have you ever purchased storable food?  If so, you should know that it is now considered to be “suspicious activity” in some areas of the country.  Just check out what is happening in New York state…

1-866 SAFE NYS is part of Safeguard New York, an NY State counterterrorism program that uses promotional material to encourage citizens to report people for engaging in “suspicious activity….which makes them stand out from others”.

 

An accompanying letter provided by the state trooper listed such “suspicious activity” as the purchase of MREs (Meals Ready to Eat), flashlights, weather proof ammunition, night vision equipment, match containers, or gas masks.

For even more examples like this, please see my previous article entitled “19 Signs That America Is Being Systematically Transformed Into A Giant Surveillance Grid“.

Sadly, most Americans are totally oblivious to all of this.

Most Americans are so addicted to entertainment and to their electronic devices that they have no idea what is going on in the real world.

I came across the following video entitled “Look Up” on YouTube earlier today.  I think that it does a great job of showing what our obsession with our electronic devices is doing to us.  Watch it for yourself and see what you think…

 

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

Nope, no bubble here…

Despite the protestations of the Fed’s Tarullo and Stein that credit markets are ‘stretched’ or ‘in bubble territory’, the printer-in-chief continues to force feed liquidity to the market and squeeze an ever-increasingly-anxious investing public into ever-more levered, covenant-lite, non-recourse, dismal-risk-adjusted-return loans just to garner more yield…

When even the heads of the organizations that the Fed is trying to save are stunned at the ease of the environment… perhaps you’ve gone too far…

 

Here is one such story from Steve Wynn – from the transcript of his most recent earnings call…

When asked about the recent financing, the outspoken Wynn goes to town…

Steve Wynn: “we finished our financing recently; The last tranche was a $750 million bond. We sold it at 5.09% with no covenants, non-recourse to the parent. And that brought our total financing for Cotai to  $3.850 billion, at an average cost of 3.3%.”

 

“Or to put it another way, we  rented the $3.85 billion for $125 million.”

 

Now on one hand, as a businessman, I’m thrilled. Never dreamed that we would see anything so tasty and wonderful as that.

 

On the other hand, it’s a reflection of questionable fiscal and monetary policy in the United States that is artificially depressed interest rates because of quantitative easing by the Fed, which is also sort of killing the value of the dollar and the living standard of the working people.

 

So the good news is, if you’re a high-class borrower with good credit rating, this is one of the most tastiest seasons of all time for 2 reasons. You’re borrowing money at artificially depressed rates. And you’re most likely going to pay them back with 85-cent dollars.

 

It’s a perfect storm for a businessperson unless you look at the truth of the matter and the impact it has on your customers and your employees.

 

And that’s a much darker story.

 

It doesn’t lend itself to a soundbite, but it’s — for every businessman in America and any economist that has their heads screwed on right, it’s an ominous situation.

 

But in terms of our moment in history, in commercial history…along with our colleagues in the industry, it’s nirvana.

 

Capital structure now is — these are mostly at the Venetian and the Wynn, things of beauty. They’re lovely, better than you could ever want. I mean, they’ve got everything, low interest rates, long maturities, low covenants. What else do you want? I mean, it’s great. If you look at it from our point of view.

 

But look at it from a consumers’ point of view or a working person’s point of view, who’s paying for all this cheap money? Well, right now, the Fed is.

 

I thought Bernie Madoff went to jail for that.”

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

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REUTERS–Shares of Twitter Inc sank 18 percent to a new low in frenzied trading on Tuesday, wiping out more than $4 billion of its market value, as early investors sold stock in the messaging service for the first time after a six-month “lock-up” expired.

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www.wb7.hk

via Zero Hedge http://ift.tt/1nmvM5m williambanzai7

When it comes to the San Francisco Fed, it is best known throughout the financial community as the group of crack economists who spend millions of taxpayer funds to investigate such probing, for kindergarteners at least, topics as: is water wet, do trees make a sound when they fall in the forest, is it still worth going to college, and are hedge funds important in a crisis. Little did we know that, at least some of them, are homicidal psychopaths with suicidal tendencies. Because this is precisely what was revealed moments ago when Bloomberg reported that the chief operating officer of the Federal Housing Finance Agency and 26-year San Fran Fed veteran, Richard Hornsby, is facing a felony charge for threatening to kill the agency’s former top official, Ed DeMarco, and then kill himself.

From Bloomberg:

Richard Hornsby last week threatened to shoot former FHFA Acting Director Edward J. DeMarco and then kill himself, according to an April 29 police report. DeMarco, who retired from the agency that regulates Fannie Mae and Freddie Mac  on April 30, was taken to a secure location while Hornsby was arrested.

The details of the charge against Hornsby can be found here.

So how did the FHFA COO nearly end up commiting a murder-suicide? Perhaps this had something to do with it: “Before joining FHFA, Hornsby worked for 26 years at the Federal Reserve Bank of San Francisco.”

WSJ, which broke the story, has more:

Mr. Hornsby didn’t respond to requests for comment, including messages left on a cellphone and a visit to his apartment. A woman who answered the phone at a California number associated with his name hung up when informed the caller was from The Wall Street Journal.

 

Mr. Hornsby allegedly threatened to shoot Mr. DeMarco after making “increasing threatening comments” about him over the course of several weeks, according to court records and Metropolitan Police Department report.

 

FHFA officials notified the agency’s inspector general about the threats on April 28, after an incident in which Mr. DeMarco was “escorted to a secure location following a report of a threat,” according to the court complaint used to secure the warrant for Hornsby. An FHFA employee, who wasn’t named in the report filed in court, said Mr. Hornsby had threatened to harm Mr. DeMarco and to kill himself.

 

The incident occurred two days before Mr. DeMarco’s previously announced retirement from the agency. The unnamed FHFA employee told the inspector general that the threats against Mr. DeMarco stemmed from disputes over Mr. Hornsby’s job performance ratings, according to court documents. A spokeswoman for the inspector general declined to comment.

So where is this SF Fed veteran now? Why free to roam among the US population, where he belongs.

At a hearing in D.C. Superior Court last Wednesday, Judge Karen Howze issued the restraining order directing Mr. Hornsby to stay away from his workplace and from Mr. DeMarco, according to court documents. Mr. Hornsby, 58, was released without being required to post bond. Another hearing in the case is set for May 14.

At least he is away from the printer at the Marriner Eccles building, where another band of current Fed sociopaths are inflicting far greater damage on the country and its citizens.

And speaking of Fed, here is just what Hornsby activities was engaging in quietly at the Fed before his murderous rage finally bubbled up to the surface:

Hornsby served at the Federal Reserve Bank of San Francisco for 26 years, holding a variety of senior level management and banking supervision positions. Most recently, Hornsby was group VP and division head for the Reserve Bank’s Financial Planning and Control and Corporate Administration Divisions. In this position, he oversaw many of the Bank’s support functions in nine states. Prior to that, he served as group VP in charge of the Bank’s Portland Branch having responsibility for director relations, branch administration and business continuity. Hornsby also directed the Bank’s business development and customer support functions bankwide. He also served as a key member of the senior management team of the Federal Reserve’s National Support Function Office which provides electronic access to the Reserve’s financial services clients nationwide. In addition to his senior management positions, he was a Supervising Examiner in the Division of Banking Supervision and Regulation for 10 years, having regulatory responsibility for bank holding companies, banks and non-bank subsidiaries.

Which perhaps explains why five years after the “recovery” US banks are in such great shape they need some $2.7 trillion in Fed excess reserves to mask their insolvency.

Tangentially, some advice: don’t haggle with that former Fed employee Ben Bernanke over his $250,000/hour speaking fee. He may be packing.

via Zero Hedge http://ift.tt/1mA43Ry Tyler Durden

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Robot is a Czech word, meaning ‘forced labor’. It’s a bit like slavery, but when it’s a machine nobody gives a damn. As if the ruling minority didn’t have enough with the mass majority drudging to the factories day-in and day-out to add value to their portfolios, now is the time when technology has reached a point where robots are a viable thing of the present, or at least the future.

• The automation market is worth an estimated $100 billion and that is predicted to quadruple within the next seven years. 
• By, 2020, it will be worth a staggering $400 billion. 
• That means that it will be roughly the equivalent of the e-commerce sector. 
• Who wouldn’t want a chunk of that? 
• The growth rate in the world market for automated products in the manufacturing sector is set to rise from its present level of approximately 6.5% per year to more than 20% after 2015. 
• It will then see a second stage in the development of the automation market, whereby, within the next seven years it will spread to the services sector as technology improves and prices fall.

Funding is also increasing from international organizations and for example the European Commission is literally pouring money into what it believes to be our future. The European Investment Fund for example announced in April 2014 that it was investing in “Robolution Capital”, which is the first fund that is intended to invest in turn in European companies that are involved in the robot sector. It managed to raise some 80 million euros to invest in the sector of activity getting money from institutions, as well as the private and industrial sector.

Robots today have seen a fall in their prices roughly equivalent to a quarter of their value half a decade ago.

Construction

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Just at the end of April, a Chinese construction company managed to build ten houses in 24 hours by using a giant 3D-printer. That’s a house every 2.4 hours, mainly from recycled material and costing under $5, 000. Now, we shall probably see the market flooded with cheap, low-quality housing, but at least it won’t cost as much as it does now. Perhaps, if the bubble continues, then those super-fast houses will be printed quicker than the money that rolls off the printing presses of Quantitative Easing.

• The printer that was used measures 6.6 m (22 ft) tall, 10 m (33 ft) wide and 32 m (105 ft) long.
• Little labor is needed to assemble the panel blocks that are printed. 
• Whether skyscrapers can be built is another matter.

But, how long will they last.

Health

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Robots are not just there for building though.

They are extensively used today in the medical field. That may mean that one of the few winners ofObamacare may actually be robot manufacturers. It’s not just about building robot vacuum cleaners that do the cleaning why you are at the gym, but it’s Remote Presence Virtual + Independent Telemedicine Assistant (RP-VITA), or a tablet that controlled remotely in order to allow doctors that are not in the presence of the patient to give a consultation. Or there is the robot that enters a hospital room and zaps the germs and the bacteria with an ultra-violet light (Xenex), just so long as there are no people in the room at the time.

Robots: Good?

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The only trouble is: you can’t help thinking that the invention and development of automated technology and robots is perhaps thought to be a way of alleviate the daily tasks that we do. Robots, however, will not replace man. They might put a few out of work, those at the very lowest echelons of society. But, the masses that are sandwiched in the middle of the ruling 1%-ers and those on the bottom rungs of life will still have to continue working. It wouldn’t do to put the mass out of work too much. Keep the majority of the mass of society just ticking over with a minimum subsistence and they will be too afraid to revolt for fear of losing what little they have.

Take everything away from them and they will start the revolution rather than hold a dinner party. The masses will just be working alongside the robots, to the benefit of the wealth, the ultra-high-net-worth people at the top and to the detriment of the poor. It’s the poor that will be out on the streets. But, that’s ok, how many people actually see a homeless person on the streets. I mean, they are there, but they are transparent, aren’t they?

Originally posted: Automation-Market Boom

Day Trading Data Sheets Futures and Forex

via Zero Hedge http://ift.tt/1j0ADUm Pivotfarm

Judging by the narrative promoted after last Friday's idiotically connived jobs report, any job is a good job… however, as The Guardian reports, that does not include a job working for Amazon.com. Quarter after quarter, we highlight the growth in Amazon employees (and death-cross-like plunge in annual sales growth). While Amazon makes no secret of the fact that it relies on seasonal work force, what went unsaid and unnoticed during President Obama's visit last year, was that the Amazon 'employees' would not have jobs or prospects after the holidays. Many of the people in those Amazon warehouses were among the long-term unemployed – shuffling from one temporary job to another to another; and due to this unstable employment, a growing number of them have found themselves living in shelters… 'employed' but homeless (or "the working poor" in America).

 

Amazon's death cross… total employees and worldwide revenue growth – (which makes perfect economic sense as the marginal employees costs approaches zero…)

 

As The Guardian reports, working away in warehouses, beyond the pages of Amazon's website, the seasonal workers and the effects that temporary contracts have on their lives are kept out of public's eye and often avoid scrutiny.

Andrew Cummins, 43, was one of these elves last year, working north of Chattanooga at an Amazon warehouse in Jeffersonville, Indiana. For three months, he stowed away clothes, working 40 hours a week at $10 an hour. He enjoyed the job and saw it as his ticket out of the Haven House, a shelter where he lives with his wife, Kristen, and stepson.

 

"They had this big hype that they were going to hire on and stuff and that didn't happen. They just worked you until the time was up and then they let everyone go," he says. According to him, about 50 other seasonal workers like him who were hired through Integrity Staffing Solutions – a staffing agency working with Amazon in Jeffersonville – were let go at the same time. "They just said they would email everybody that they let go but we never heard anything back. And then you can't apply for [another Amazon job] for another year after you worked for them."

Which brings us to the new normal in America – The Working Poor

The underlying situation at the Chattanooga facility belied the president's speech. He spoke about the recession, noting that "it cost millions of Americans their jobs and their homes and their savings." He spoke of the long-term unemployed and their struggles in finding a job. He spoke of the great job that Amazon and Jeff Bezos were doing taking care of their employees.

 

Since Amazon opened its warehouse in Jeffersonville, one homeless shelter, Haven House, has been a home to between two and six of its employees at all times, says Barbara Anderson, the shelter's director.

 

"The impact is profound. One man was sleeping in a car when he landed his 'permanent job' with Amazon," she says. His good luck didn't last long. "He lost everything all over again. The jobs are good but the temporary status sets people up for failure."

 

More than half of the shelter's tenants are working poor, according to Anderson. Often times they are either in between jobs or working jobs that pay just enough to make ends meet, but not enough to help them break out of the cycle of homelessness.

 

With lack of subsidized housing affordable at their level of income, they are stuck. They have no one to co-sign an apartment for them and no way to save up for a security deposit, much less the first and last months' rent that many landlords now require before one moves in.

 

“When you live in a shelter, the first thing you want to do is get out,” says Anderson. People often view their first paycheck as ticket out, but as soon as they lose that job, they are back at the shelter. “They get that first paycheck and they are gone. Then four to six weeks later, I see them again. They leave too early.”

And The Working Poor are banking on warmer weather…

For Tim, the job at Amazon is just a short-term solution. "I can't live on $10 an hour," he says, adding. "If I am at Amazon longer than a month, I'd be very disappointed frankly."

 

It's his hope that warmer weather will bring better news. "Temporary or contract jobs are going to pick up, because employers are still a little skittish about bringing on permanent employees and so to keep the costs down, they are going to increase their contracting levels. That's what I am counting on," says Tim.

Sadly… the "working poor" is all too common…

There are about 3.5 million Americans who have been out of a job for longer than six months, according to the most recent unemployment report.

 

Only one in 10 of them is likely to find stable employment down the road, according to Brookings Institute. While some give up looking altogether, those who keep looking are often only able to find part-time, sporadic employments.

It seems, just as we made all too clear previously, that work is indeed being punished in America…

This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, "the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045."

We realize that this is a painful topic in a country in which the issue of welfare benefits, and cutting (or not) the spending side of the fiscal cliff, have become the two most sensitive social topics. Alas, none of that changes the matrix of incentives for most Americans who find themselves in a comparable situation: either being on the left side of minimum US wage, and relying on benefits, or move to the right side at far greater personal investment of work, and energy, and… have the same disposable income at the end of the day.

via Zero Hedge http://ift.tt/1s0t85j Tyler Durden

Selling the Car Crash and Buying the Cancer

By

Cognitive Dissonance

TwoIceFloes.com

 

 

For just a few minutes I ask that you suspend disbelief and consider what I am about to say from the perspective of your point of view. Forget what others may say or do. Ignore how you think the herd might react to the scenario I’m about to outline and look deep within yourself into that honest place we all possess and rarely visit.

Suppose you were told by an extremely trusted source, I think the word is impeccable, that sometime in the next week you will suffer a terrible accident, a car crash to be specific. While you will most likely not die in or from this accident, you will probably wish you had because the pain and suffering you are facing will test you like you have never been tested before. You have no details of the event, only that it is very soon, inevitable and will be life changing.

Or………you can choose what is behind the second curtain in this fictitious world of clear foresight and alternative scenarios, and instead of immediate pain and disfigurement you get to kick the can down the road and select the cancer, the big ‘C’, and hope for the best.

The good news is the occultist seer, your provocateur of prophecy, projects that the cancer will probably not kill you as well, though the mortality rate is much higher than the car crash. And it isn’t even an especially fast acting variety, so your life can proceed pretty much uninterrupted for a year or two, maybe even more, until the surgery (cut) chemo (poison) and radiation (burn) become unavoidable and must begin.

Besides, who knows what miracles medical science can come up with between now and then? There are success stories everywhere of cancer survivors beating the odds and living a long, healthy and satisfying life. Regardless, when contemplating the choice between an emergency responder using the jaws-of-life to extract you from your mangled motor vehicle or a handsome skilled surgeon extracting your diseased colon/lung/prostate while you are knocked out cold, is there really any choice in the matter?

So when, not if, you decide to buy the cancer and sell the car crash, will your perspective change at least a little with respect to those lying corrupt disingenuous politicians, central bankers, corporate executives, too big to fail bank CEO’s and millions of other ‘bad’ guys we blame for making matters worse when the ‘obvious’ choice to make was the car crash and not the cancer?

 

 

I suppose the more important question to be asked would be why we were even at the point where this choice between two extremely poor paths was presented. Then again, conditioned slaves can complain, bicker and debate all they want about their living conditions, but never about their actual slavery.

Intellectually we understand the ‘correct’ decision to make back in 2008-2009 was to bite the bullet and select the car crash. Sure it would be tough, real tough, and there is no doubt that much suffering would follow. Millions upon millions of people stood to lose their jobs, homes and personal retirement savings and public pensions. The collapsing dominoes and the resulting whoosh would have been shocking and unimaginable even to those of us who believe we had a fairly good idea how it would all go down.

Banks and business large and small would have gone under, hundreds of municipalities most definitely would have declared bankruptcy and countless lives altered in such a way that the memory would linger from generation to generation for as long, or longer, than the reverberation from the Depression of the 1930’s.

The shock waves of the car crash would have gone global and billions would have had their standard of living slashed in half or more. In fact the greatest damage would not be felt by the first world nations, but by the second and third world. The proof is the effects seen in the less developed nations as the first world exports massive cancerous inflation in the form of currency printing. When the first world catches a cold, the second and third world comes down with life threatening pneumonia.

Unlike the scenario I outlined above where you and I are personally facing the prospect of either immediate or delayed pain, the difference when contemplating a national/global car crash or cancer choice is our perceived lack of immediate proximity to the resulting pain and suffering. Real or imagined, based in fact or fiction, we all tend to emotionally and intellectually diminish our proximity to external danger by any number of techniques such as denial, rationalization, apathy and emotional distancing.

 

 

Part of the reason we believe the car crash choice to be proper was/is our clearer understanding of the inevitable implosion that results from the cancer choice. Only this time the death and injuries will be orders of magnitude greater than what might have been experienced in 2008. We perceive little to no personal benefit from kicking the can and believe great harm will result from doing so.

In reality the only thing we know for certain is that life would be very different from today if we had faced the music back in 08-09. Better or worse is the real question, though I suspect better……if for no other reason than the wound eventually heals or it festers and you die.

In addition, we recognize the large (and growing even larger) disparity of illness and symptoms that results from the cancer choice between those who have and those who have not. It is believed that if the car crash were chosen, while the have not’s will suffer under any scenario; the haves might actually be taken down several notches while also being pulled from the wreck, a dubious assumption at best……at least for the top one or two percent.

Worse, our sense of outrage is inflamed when we realize that not only are the elite not suffering the same cancer symptoms as we are, but are actually benefiting from, even prospering from, the cancer choice. If nothing else they appear to be bleeding the middle class dry while kicking the can down the road as far and for as long as they can.

Wealth has its own rewards and distinct advantages, and the belief that the wealthy would push the floundering swimmer underwater in order to support (let along enrich) themselves is outrageous, at least from the perspective of the now underwater swimmer.

The list of reasons why ‘we’ feel the cancer to be the wrong choice, oftentimes a belief developed with the benefit of hindsight, is endless and ultimately self personalized to fit our own worldview and denial/rationalization spectrum. Regardless of the specifics of your own view on this subject, the real value to be unleashed from this introspection is the better understanding of our ‘self’ that results when we look deep into that honest place we all possess and rarely visit.

 

05-05-2014

Cognitive Dissonance

 

via Zero Hedge http://ift.tt/1j0snE5 Cognitive Dissonance

Submitted by David Stockman via Contra Corner blog,

Here’s how the daisy chain of debt works— short form. LBO’s issue debt—loads of it. Leveraged buyouts are now being priced at typical top-of-the-bubble ratios of 10X cash flow (“adjusted EBITDA”). The portion of these LBO debt towers that consists of bank term loans and revolver facilities is sold to freshly minted financial conduits called CLOs (for Collateralized Loan Obligations) which are not real companies and which do not have any money!

No problem. What happens is that credit hedge funds and Wall Street trading desk hit a computer key, open a new spreadsheet window, wrap it in legal boilerplate, provide this newly minted CLO with a credit line and then start bidding for available LBO paper in the junk loan market. When they have accumulated enough offers, they slice and dice the resulting portfolio of LBO loans, and issue multiple tiers of debt– with these new slices being rated from AAA to junk against the loans listed on the spreadsheet.

So we now have a spreadsheet, a part-time “portfolio manager” and hundreds of millions of the latest CLO toxic waste. For 95 weeks running, there was no want of buyers for this CLO issued paper. In its infinite wisdom, the Fed drove interest rates on CDs and high quality paper to nearly zero—–so the scramble for “yield” was on. Soon Grandpa was being forced to buy a high yield mutual fund in order to pay the light bills.

But now LBO risks are soaring due to recklessly escalating deal prices and also because the LBO kings are stepping-up their patented late cycle cash strip-mining operations in the form of “leveraged recaps” funded with new “cov lite” debt. So even yield starved retail investors have begun to turn tail and run. During the last two weeks there were actually outflows from high yield mutual funds.

That leaves a big gap in the market, however. The CLO jockeys are still banging out new spreadsheets, but buyers for the sliced and diced CLO paper are suddenly getting scarcer. Still, no problem!

Here’s why. Wall Street is back in the business of lending money at the Fed’s gifted rate of zero plus a modest 80 basis point spread—so that the fast money can buy CLO paper on 9 to 1 leverage. There is your triple shuffle.

It didn’t work out last time, but that doesn’t matter because the game is obvious. After enough buying on Wall Street’s triple leverage, junk loan prices might temporarily rebound. Then the brokers will put out the call to retail: The junk loan asset class is rebounding—its time to come back.  For the final shearing, that is!

Today’s Wall Street Journal article explains exactly how its being done. Needlessly to say, every one of the big banks back in the business got bailed out last time by TARP and the Fed. They seem to learn something—even if our policy makers never do…

By Katy Burne, Wall Street Journal

 

Banks again are doling out money to hedge funds and other investors to finance purchases of complex debt securities, returning to a practice that helped fuel the debt boom ahead of the financial crisis.

RBC Capital Markets, Société Générale ., BNP Paribas  and Wells Fargo are among the banks offering to let investors borrow money, also known as providing leverage, to buy collateralized loan obligations, say investors and bankers. CLOs are bonds typically backed by pools of low-rated corporate loans.

 

Borrowing programs for such esoteric securities have been only selectively available in the years since the crisis. While banks have lent to a handful of investors, the practice picked up late last year when funding costs began to fall….

 

Finding new buyers would help them offload the debt, while keeping prices relatively high. Some banks also are trying to ensure there will be demand for more CLOs they help create.

 

Banks “are resorting to creating economic incentives to get primarily hedge funds to step into this void,” said Oliver Wriedt, senior managing director at CIFC Asset Management LLC, which manages CLOs….

 

Hedge funds “have finally come to grips with leverage and begun to embrace it” for CLOs, said Jean de Lavalette, head of securitized products sales at Société Générale.

 

But with leverage comes risk. Even a small drop in the market could force investors to pledge more cash and other collateral to offset the securities’ decline. Losses are magnified when borrowed money is used….

 

…..GoldenTree Asset Management recently purchased CLOs using leverage. Joe Naggar, a partner at GoldenTree in New York, said using leverage makes sense because prices on highly rated CLOs have fallen, increasing their yield relative to other debt securities. Borrowing money to buy could bolster returns if prices rebound…..

 

Banks have offered to lend some investors as much as $9 for every dollar that the buyers invest in CLOs, say traders and strategists. Others are being offered $8 for every $2.

 

An investor in a triple-A-rated CLO earning 1.50 percentage point over the London interbank offered rate—using 10% of his or her own money and paying 0.80 percentage point over Libor for the financing—could earn about 8% in a year. That compares with annual interest rates near 2% on a standard triple-A CLO.

 

Citigroup researchers in a mid-April note to clients predicted that the new source of financing could help drive up prices of triple-A-rated CLOs.

 

That could be a boon to a market that has stumbled under the threat of new rules on what banks can hold on their books. CLO prices tumbled, and the creation of new CLOs slowed earlier this year as the market digested the rules that will ban banks from investing in certain CLOs.

 

Since then, CLO prices have begun to recover, and CLO issuance has picked up after a slow start to the year. More than $35 billion of CLOs were created so far in 2014, the most for that period since 2007, when $36.4 billion were created, according to S&P Capital IQ Leveraged Commentary & Data….

 

Read the Complete Article Here.

via Zero Hedge http://ift.tt/RpkH8j Tyler Durden

Fukushima did not just suffer meltdowns, or even melt-throughs …

It suffered melt-OUTS … where the nuclear core of at least one reactor was spread all over Japan.

In addition, the Environmental Research Department, SRI Center for Physical Sciences and Technology in Vilnius, Lithuania reported in the Journal of Environmental Radioactivity:

Analyses of (131)I, (137)Cs and (134)Cs in airborne aerosols were carried out in daily samples in Vilnius, Lithuania after the Fukushima accident during the period of March-April, 2011.

 

***

 

The activity ratio of (238)Pu/(239,240)Pu in the aerosol sample was 1.2, indicating a presence of the spent fuel of different origin than that of the Chernobyl accident.

(“Pu” is short for plutonium.)   Fukushima is 4,988 miles from Vilnius, Lithuania. So the plutonium traveled quite a distance.

Today, EneNews reports that a fuel fragment from Fukushima has been found in Norway:

Atmospheric Chemistry and Physics Discussions, Atmospheric removal times of the aerosol-bound radionuclides 137Cs and 131I during the months after the Fukushima Dai-ichi nuclear power plant accident – a constraint for air quality and climate models, May 2012: Hot particles (particles that carry very high radioactivity, e.g., fragments of the nuclear fuel) were present in the FD-NPP plume.

 

 

Elsevier (academic publisher) — Fukushima Accident: Radioactivity Impact on the Environment, Pavel P. Povinec, Katsumi Hirose, Michio Aoyama, 2013: Paatero et al. (2012) estimated that a significant part of the Fukushima-derived radioactivity is in hot particles from autoradiogram of a filter sample from 1 to 4 April 2011 at Mt. Zeppelin, Ny-Alesund, Svalbard.

 

Poster for Alaska Marine Science Symposium (Arctic Ocean and Bering Sea/Aleutian Islands) — Fukushima fallout: Aerial deposition on the sea ice scenario and wildlife health implications to ice-associated seals, Jan. 20, 2014: Exposure to fallout while on ice in 2011 […] Models suggest pinnipeds may have been exposed while on ice to the following: […] Hot particles, nuclear fuel fragments, were detected in air samples taken in Svalbard, Norway (Paatero et al. 2012).

 

See also: Gundersen: This video “confirms our worst fears” — Scientist: Reactor core materials found almost 500 km from Fukushima plant — 40,000,000,000,000,000,000 Bq/kg — Can travel very, very significant distances — Hot particles found in 25% of samples from Tokyo and Fukushima (VIDEO)

Fukushima is 10632 kilometers – or 6,606 miles -from Svalbard, Norway.

Moreover, the distance is actually much further … because it took a circuitous route from Fukushima to Norway.

As ENENews reports:

(Paatero et al. 2012) Journal of Environmental Radioactivity, Airborne fission products in the High Arctic after the Fukushima nuclear accident: It is evident that the plume arriving in Svalbard did not come from Europe but directly from North America […] [Hot particles are] either fragments of the nuclear fuel or particles formed by the interactions between condensed radionuclides, nuclear fuel, and structural materials of the reactor […] Based on the total beta, 137Cs and 134Cs activity content […] on the filter it can be estimated that a significant part of the activity related to Fukushima was in hot particles. So far the authors are not aware of any other reports concerning hot particles from the Fukushima accident. […] the radionuclides emitted into the atmosphere were quickly dispersed around practically the whole northern hemisphere within a couple of weeks.

In other words, the hot particles from Fukushima traveled to North American, and then to Europe.

This is only logical.

We noted 2 days after the 2011 Japanese earthquake and tsunami:

The jet stream passes right over Japan. The jet stream was noticed in the 1920′s by a Japanese meteorologist near Mount Fuji, and the Japanese launched balloon bombs into the jetstream to attack America during WWII.

(Indeed, U.S. nuclear authorities were very concerned about the West Coast getting hit by Fukushima radiation … but they covered it up.)

So the Fukushima hot particles traveled from from Japan to the West Coast of North America … and then were carried by wind currents from there.

It’s approximately 5,000 miles from Fukushima to the closest part of North America. It’s another 4,298 miles from San Francisco to Svalbard, Norway.

So the hot particle traveled roughly 9,298 miles from Fukushima to Norway.

That’s a long way, as shown by this rough mock-up using Google maps:

via Zero Hedge http://ift.tt/1ijDUCC George Washington