Category: zerohedge

One of the underreported stories from last week, noted here previously, was that quietly, on the day in which French unemployment soared to a new 16 year high, French president Hollande did what every true Keynesian in his position would do and dispatched troops to the Central African Republic due to a “duty to intervene” and stop the “alarming, frightening massacres” taking place there. There were no YouTube clips available to justify said massacres yet: we assume they are being produced currently. A few days later the fighting has begun with Reuters reporting that French troops fought gunmen in Bangui, the capital of Central African Republic, on Monday as they searched for weapons in an operation to disarm rival Muslim and Christian fighters responsible for hundreds of killings since last week. Shooting erupted near the airport in the morning after gunmen refused to hand over their weapons, and French forces later came under attack by former rebels in the city centre. France said it was prepared to use force if fighters rejected calls to disarm or return to barracks. Paris boosted its military presence to 1,600 troops at the weekend as waves of religious violence swept its former colony.

That’s not news. The news is that the US is once again getting involved in yet another foreign conflict. Also from Reuters:

• PENTAGON CONSIDERING REQUESTS FOR U.S. MILITARY SUPPORT TO FRENCH AND AFRICAN UNION FORCES IN CENTRAL AFRICAN REPUBLIC – U.S. OFFICIAL
• U.S. MILITARY LIKELY TO PROVIDE SOME LOGISTICAL SUPPORT -OFFICIAL

Some additional detail from the WSJ:

The U.S. will airlift African Union forces to the Central African Republic as part of an effort to aid French troops who are in the country to put down rising violence, defense officials said.

 

Defense Secretary Chuck Hagel authorized the deployment of the U.S. transport planes and pilots Sunday night, responding to a request for assistance from France. The planes will be used to carry troops from Burundi to the Central African Republic, where France has deployed 1,600 troops to try to quell rising violence.

 

Fighting has increased in the Central African Republic since March when a rebel group seized power. The rebel leader, Michel Djotodia, named himself president.

 

Turmoil has escalated in recent days, claiming 400 lives and prompting the French intervention. On Monday, French soldiers began disarming fighters in the Central African Republic.

And yet something is different about the C.A.R. – drones. From IBTimes:

Drones were deployed over the Democratic Republic of the Congo on Tuesday, marking the first time the United Nations has used unmanned surveillance aircraft in its peacekeeping efforts. A fleet of five unarmed drones will help U.N. troops monitor the vast Central African country of 66 million people, which has been plagued by violent militias for decades.

 

“Such high-technology systems allow a better knowledge of what is happening on the ground, which allows a force to better do its job,” said Hervé Ladsous, U.N. Under-Secretary-General for Peacekeeping Operations, according to the U.N. News Agency.

 

The new drone program marks another rare initiative for the U.N. It was originally approved by the Security Council in January, due in large part to the conflict in Goma. M23 surrendered last month, but ongoing peace talks in Uganda between the rebels and the Congolese government have reached an impasse over the wording of the final agreement.

Of course, someone must have benefited from the drone “surge.” Indeed, someone did.

The drones for the Congo fleet were purchased from the electronics firm Selex ES, a unit of the Italian industrial and defense company Finmeccanica SpA (BIT:FNC). Deployment was originally planned for August, but a complicated procurement process delayed the launch until this week. If the drones prove effective, the U.N. may consider launching similar initiatives in other countries where peacekeeping operations are under way.

In other words, look for the C.A.R./Congo region to get drastically “destabilized” in the coming weeks, especially with both French and the US forced on the ground, and with hundreds of drones in the air repeating the bang up “peace intervention” job most recently achieved in Afghanistan. Why? Simple – because China has now been actively expanding its sphere of influence in Africa as we have been reporting over the past two years. Indeed as the map below which we posted first over a year ago shows, the Central African Republic is the only place that China does not have a major documented presence yet.

 

So the US (and the west) do the only thing they can: find a pretext to land a military force in order to stake a claim on what they believe are their critical strategic interests before Chinese moneyed-interests decide to do the same.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/i0Z6v1ErkAU/story01.htm Tyler Durden

A month ago, the Bank of England’s Cunliffe dismissed UK realtors’ fears of a central bank-driven bubble in housing, by stating confidently that “it is not a boom or a bubble. It is a market correction, albeit a fairly quick one.” But now, the man really in charge of the liquidity pedal, the BoE head Mark Carney has proclaimed: 

• BOE’S CARNEY SAYS CONCERNED ABOUT POTENTIAL DEVELOPMENTS IN UK HOUSING MARKET
• BOE’S CARNEY: WANTS TO AVOID HOUSING MARKET MOVING TO ‘WARP SPEED’

In the speech at the New York Economic Club, Carney went on note that this BoE-created bubble could be popped by raising capital requirements against the housing sector if need be; but we suspect the faster way to pop the momentum-chasing hot-money frenzy will be to pass the foreign homebuyers’ capital gains tax.

 

So, it would appear, that unlike his brethren in the US, Carney is able to see bubbles – and it seems is capable and ready to react to them…

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

A month ago, the Bank of England’s Cunliffe dismissed UK realtors’ fears of a central bank-driven bubble in housing, by stating confidently that “it is not a boom or a bubble. It is a market correction, albeit a fairly quick one.” But now, the man really in charge of the liquidity pedal, the BoE head Mark Carney has proclaimed: 

• BOE’S CARNEY SAYS CONCERNED ABOUT POTENTIAL DEVELOPMENTS IN UK HOUSING MARKET
• BOE’S CARNEY: WANTS TO AVOID HOUSING MARKET MOVING TO ‘WARP SPEED’

In the speech at the New York Economic Club, Carney went on note that this BoE-created bubble could be popped by raising capital requirements against the housing sector if need be; but we suspect the faster way to pop the momentum-chasing hot-money frenzy will be to pass the foreign homebuyers’ capital gains tax.

 

So, it would appear, that unlike his brethren in the US, Carney is able to see bubbles – and it seems is capable and ready to react to them…

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

While Newport Beach Lamborghini dealerships may be engaging in marketing gimmicks such as exchanging the ‘explosively volatile’ Bitcoins for Teslas; the true Bitcoinaires opt for something more internally combustible…

 

 

h/t @PharmakoiBoy

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VADLWS2G_Vs/story01.htm Tyler Durden

 

 

 

 

 

 

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CeFwTGgUM70/story01.htm williambanzai7

The quarterly Flow of Funds report by the Fed has been released and the latest household net worth numbers are out. While not nearly quite as dramatic as last quarter’s wholesale dataset revision, which saw all of America suddenly worth $3 trillion more primarily due to a change of how “pension entitlements” (formerly “pension reserves”) are calculated (more more in the full breakdown from September), with the resulting total net worth rising to a total of $74.8 trillion, according to the just released data, in the third quarter, US housholds, or rather a very tiny subset of them, saw their net worth rise once again, this time to $77.3 trillion from a revised $75.3 trillion.

The reason for this increase, and why we say a “subset” is because virtually all of the net worth increase was the result of a $1.5 trillion bounce in financial assets (read: capital markets) to a new all time high of $63.9 trillion. As most know by know, the bulk of the exposure to this asset class is held by the ultra wealthy, particularly in the form of Corporate Equities, the category which rose by the single largest amount in the quarter, or $600 billion. Away from financial assets, the remainder, or $500 billion of the increase, was due to a rise in real estate values to $21.6 trillion, still over $3 trillion lower than the all time high for the category reached in Q4 2006.

Curiously enough, the ongoing increase in assets, and thus net worth, continues without any comparable increase in liabilities, as total household debt rose by a minuscule $116 billion, of which the $71 billion increase in consumer credit (read student and car loans) was the biggest offset to net worth growth.

This is how the US household balance sheet looked like at September 30, 2013:

 

This is how this chart looked last quarter:

Finally, putting it all together, when looking at the assets and liabilities of the US household on a very simplified basis, recall what Citigroup pointed out recently: “the rich hold assets, the poor have debt.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z739bidmvfo/story01.htm Tyler Durden

Submitted by Simon Black of Sovereign Man blog,

Mohamed Bouazizi. It’s not a name that means much to most people. But you’ll recall his story.

Frustrated with the absurd amount of regulation and corruption that prevented him from being able to put food on the table for his family, Bouazizi was the 26-year old Tunisian fruit merchant that set himself on fire in 2011.

In doing so, all the pent up frustration across the Middle East and North Africa erupted all at once; the entire region immediately plunged into multi-year revolution which became known as the Arab Spring that has since toppled a number of governments.

Like individual people, societies have their own breaking points. They build up anger and frustration for years… sometimes decades. Then all it takes is one spark. One catalyst. And it all becomes unglued.

Just yesterday, a 33-year old Indian man got hit by the proverbial bus in Singapore’s Little India neighborhood. That was the catalyst. What transpired for the next several hours was a full blown riot… the first of its kind since 1969.

Several hundred rioters stormed the streets. They started off smashing the up the bus that was still on the corner of Hampshire Road and Race Course Road. Then they started throwing objects at the ambulance staff who were unsuccessful in extracting the man in time to save his life.

By the end of the evening, an angry mob had lit five police vehicles on fire, plus the ambulance, leaving the streets in a towering inferno.

 

 

The government immediately went into damage control mode trying to explain what happened. But the explanation is really quite simple.

Singapore has had years of tensions building. The wealth gap is growing like crazy. Wealthy people are becoming ultra-wealthy, while the majority of folks see the cost of living rise at an alarming rate.

Strong ideological and ethnic differences are boiling over. And backlash against immigrants, especially from certain countries, is becoming an acute and obvious problem.

These issues are commonplace. Ideological differences. The wealth gap and economic uncertainty. Immigration challenges.

They’re the same issues, for example, that have plunged much of Europe into turmoil, including the rise of a blatantly fascist political party in Greece.

And these same issues exist, in abundance, in the Land of the Free… where a number of serious ideological divides are becoming obvious social chasms.

Printing money with wanton abandon. Racking up the greatest debt burden in the history of the world. Doling out wasteful and offensively incompetent social welfare programs at the expense of the middle class. Brazenly spying on your own citizens. These are not actions without consequences.

And if it can happen in Singapore – one of the safest, most stable countries on the planet, it can happen anywhere. Even in a sterile American suburb.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/lD2gzxITtLI/story01.htm Tyler Durden

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden

The Obamacare enrollment portal is the gift that keeps on giving endless examples of government incompetence. The latest comes from Bloomberg which informs us that “there’s no way to tell how many people who think they’ve signed up for health insurance through the U.S. exchange actually have, after about 1 in 4 enrollments sent to insurers from the federal website had garbled included incomplete information.” Still that particular glitch was not enough to prevent Obama from taking full credit for a “fixed” website after somehow the White House managed to calculate that sign ups soared to 100,000 people, and have taken off since the “fix.”

More:

[T]he acknowledgment suggests consumers need to be vigilant about their health plan purchases. Letters from insurers confirming coverage can take a week or more, and the Obama administration now says people should call their companies if they aren’t contacted within that time.

 

With repairs to the front end of healthcare.gov leading to a spurt of 29,000 new enrollments in the first two days of December, U.S. officials are now focusing on what happens after customers select a plan on the website. Enrollment isn’t complete until consumers make their first payment, which is due Dec. 31 for insurance coverage that will begin on Jan. 1.

 

“It’s time for people to move toward locking in coverage and paying for it,” said Joel Ario, a consultant with Manatt Health Solutions, in a telephone interview. Insurers will face “a tall challenge” trying to resolve enrollment errors as the time shortens before coverage begins Jan. 1, he said.

 

The Centers For Medicaid & Medicare Services, which runs the federal health website, doesn’t have “precise numbers” on how many of the enrollment forms called 834s have been sent to insurers or how many have errors, Julie Bataille, an agency spokeswoman, said during a Dec. 6 conference call.

One aspect where Obamacare is working, is where the government decided to bypass the healthcare.gov 500 million lines of code monstrocity entirely and allow consumers to enroll directly with state insurance companies.

A project the government began two weeks ago with 16
insurance companies in three states — Texas, Florida and Ohio –
– to allow them to enroll people directly into health plans,
bypassing healthcare.gov, has improved the working relationship
among the government’s technicians and those at the companies,
said a person familiar with the work who asked not to be
identified because the information is private. The new
cooperation has helped to resolve issues with the data
transfers, the person said.

Alas, the bulk of the enrollment problems remain when using the central portal:

“In general our 834 files have been pretty good,” said Kathleen Oestreich, CEO of Meritus, a Tempe, Arizona, startup insurer funded by government loans. The company has seen only one “orphan” member, she said — a person who called and said they hadn’t received an enrollment notice even though they had picked Meritus as their insurer.

 

More troubling are “ghosts” — people whose files never reach their insurers, Robert Laszewski, an insurance industry consultant, said. It’s unclear how many people may fall into that category or how companies will identify or reach them.

 

“If they enroll 500,000 people and 25,000 of them walk into the doctor’s office and nobody knows who they are, that’s a problem,” he said in a phone interview.

It is indeed. And it is just the start, because while the enrollment process of Obamacare will (one hopes) eventually be fixed, that will merely unleash all new, and far more disturbing problemsn. Such as the deductible sticker shock that is about to be unleashed upon Americans in need of medical aid, especially those who choose the cheaper “bronze” plan. The WSJ reports:

As enrollment picks up on the HealthCare.gov website, many people with modest incomes are encountering a troubling element of the federal health law: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn’t cover. The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.

 

That is 42% higher than the average deductible of $3,589 for an individually purchased plan in 2013 before much of the federal law took effect, according to HealthPocket Inc., a company that compares health-insurance plans for consumers. A deductible is the annual amount people must spend on health care before their insurer starts making payments.

 

The health law makes tax credits available to help cover insurance premiums for people with annual income up to four times the poverty level, or $45,960 for an individual. In addition, “cost-sharing” subsidies to help pay deductibles are available to people who earn up to 2.5 times the poverty level, or about $28,725 for an individual, in the exchange’s silver policies. As enrollment picks up on HealthCare.gov, many people with modest incomes are encountering a troubling element: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn’t cover. 

 

But those limits will leave hundreds of thousands or more people with a difficult trade-off: They can pay significantly higher premiums for the exchange’s silver, gold and platinum policies, which have lower deductibles, or gamble they won’t need much health care and choose a cheaper bronze plan. Moreover, the cost-sharing subsidies for deductibles don’t apply to the bronze policies.

 

That means some sick or injured people may avoid treatment so they don’t rack up high bills their insurance won’t cover, according to consumer activists, insurance brokers and public-policy analysts—subverting one of the health law’s goals, which is to ensure more people receive needed health care. Hospitals, meantime, are bracing for a rise in unpaid bills from bronze-plan policyholders, said industry officials and public-policy analysts.

Ah: central planning, also known in the now-defunct USSR as the where “whatever can go wrong, will.” As Obama (and soon the Fed) are learning first hand…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/F0qPqBbv3MM/story01.htm Tyler Durden