Category: zerohedge

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The absurd “War on Gold” that India has launched this year has been covered many times on this site. From the moment I read about it, it was obvious that if Indians want their gold, the Indians will have their gold. You can’t break thousands of years of tradition and culture because of the ignorant whims of a few bureaucrats.

Earlier today, Reuters published an article detailing the extent to which Indian smugglers will go in order to bring the money of kings into the country. This includes hiding it in underwear, swallowing it whole and even painting gold staples gray. What is most disturbing is the lengths authorities are willing to go to in order to stop a supposedly free people from buying a brick of metal. From Reuters:

(Reuters) – Indian gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.

 

Stung by rules imposed this year to cut a high trade deficit and a record duty on imports, dealers and individual customers are fanning out across Asia to buy gold and sneak it back into the country.

 

Sri Lanka, Thailand and Singapore are the latest hotspots as authorities crack down on travelers from Dubai, the traditional source of smuggled gold.

Stop one and another will rise. As always.

In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers.

Because that makes a so much sense.

“There has been a several-fold increase in gold smuggling this year after restrictions from the government, which has left narcotics behind.”

 

That suggests official data showing a sharp fall in gold buying, which has helped narrow India’s current account gap, may significantly underestimate the real level of gold flows.

 

Last week, Sri Lanka limited the amount of jewellery its residents can take out of the country and it will try to monitor whether they bring it back. Pakistan banned all gold imports in August for a month as it believed much was being smuggled on into India.

 

Indian gold premiums have soared to $130 an ounce over London prices due to the supply crunch, compared with about $2 an ounce in Hong Kong, Singapore and Thailand.

 

In June, a passenger flying from Dubai was caught at New Delhi airport with about 755 grams (1.7 lbs) of solid gold staples painted grey. Officials stopped the man because the cardboard boxes he was carrying were stapled far more than seemed necessary.

Simply genius.

“We are trying to plug all the loopholes. We have strengthened our anti-smuggling staff and installed door metal detectors,” said S.A.S. Navaz, deputy commissioner of customs in the south Indian city of Kochi. “We are spending sleepless nights.

Sleepless nights because citizens want to buy a piece of yellow metal. You might have bigger problems than gold champ.

In an effort to change that, Mumbai customs offers a reward of up to 50,000 rupees per kg of bullion seized for informers in gold smuggling cases. Cocaine and heroin informers get only up to 40,000 rupees and 20,000 rupees respectively.

Idiots.

Full article here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rVpVClX9T6U/story01.htm Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

The too big to fail banks have a larger share of the U.S. banking industry than they have ever had before.  So if having banks that were too big to fail was a "problem" back in 2008, what is it today?

As you will read about below, the total number of banks in the United States has fallen to a brand new all-time record low and that means that the health of the too big to fail banks is now more critical to our economy than ever.  In 1985, there were more than 18,000 banks in the United States.  Today, there are only 6,891 left, and that number continues to drop every single year.  That means that more than 10,000 U.S. banks have gone out of existence since 1985. 

Meanwhile, the too big to fail banks just keep on getting even bigger.  In fact, the six largest banks in the United States (JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley) have collectively gotten 37 percent larger over the past five years.  If even one of those banks collapses, it would be absolutely crippling to the U.S. economy.  If several of them were to collapse at the same time, it could potentially plunge us into an economic depression unlike anything that this nation has ever seen before.

Incredibly, there were actually more banks in existence back during the days of the Great Depression than there is today.  According to the Wall Street Journal, the federal government has been keeping track of the number of banks since 1934 and this year is the very first time that the number has fallen below 7,000…

The number of federally insured institutions nationwide shrank to 6,891 in the third quarter after this summer falling below 7,000 for the first time since federal regulators began keeping track in 1934, according to the Federal Deposit Insurance Corp.

And the number of active bank branches all across America is falling too.  In fact, according to the FDIC the total number of bank branches in the United States fell by 3.2 percent between the end of 2009 and June 30th of this year.

Unfortunately, the closing of bank branches appears to be accelerating.  The number of bank branches in the U.S. declined by 390 during the third quarter of 2013 alone, and it is being projected that the number of bank branches in the U.S. could fall by as much as 40 percent over the next decade.

Can you guess where most of the bank branches are being closed?

If you guessed "poor neighborhoods" you would be correct.

According to Bloomberg, an astounding 93 percent of all bank branch closings since late 2008 have been in neighborhoods where incomes are below the national median household income…

Banks have shut 1,826 branches since late 2008, and 93 percent of closings were in postal codes where the household income is below the national median, according to census and federal banking data compiled by Bloomberg.

It turns out that opening up checking accounts and running ATM machines for poor people just isn't that profitable.  The executives at these big banks are very open about the fact that they "love affluent customers", and there is never a shortage of bank branches in wealthy neighborhoods.  But in many poor neighborhoods it is a very different story…

About 10 million U.S. households lack bank accounts, according to a study released in September by the Federal Deposit Insurance Corp. An additional 24 million are “underbanked,” using check-cashing services and other storefront businesses for financial transactions. The Bronx in New York City is the nation’s second most underbanked large county—behind Hidalgo County in Texas—with 48 percent of households either not having an account or relying on alternative financial providers, according to a report by the Corporation for Enterprise Development, an advocacy organization for lower-?income Americans.

And if you are waiting for a whole bunch of new banks to start up to serve these poor neighborhoods, you can just forget about it.  Because of a whole host of new rules and regulations that have been put on the backs of small banks over the past several years, it has become nearly impossible to start up a new bank in the United States.  In fact, only one new bank has been started in the United States in the last three years.

So the number of banks is going to continue to decline.  1,400 smaller banks have quietly disappeared from the U.S. banking industry over the past five years alone.  We are witnessing a consolidation of the banking industry in America that is absolutely unprecedented.

Just consider the following statistics.  These numbers come from a recent CNN article…

-The assets of the six largest banks in the United States have grown by 37 percent over the past five years.

-The U.S. banking system has 14.4 trillion dollars in total assets.  The six largest banks now account for 67 percent of those assets and all of the other banks account for only 33 percent of those assets.

-Approximately 1,400 smaller banks have disappeared over the past five years.

-JPMorgan Chase is roughly the size of the entire British economy.

-The four largest banks have more than a mi
llion employees combined.

-The five largest banks account for 42 percent of all loans in the United States.

-Bank of America accounts for about a third of all business loans all by itself.

-Wells Fargo accounts for about one quarter of all mortgage loans all by itself.

-About 12 percent of all cash in the United States is held in the vaults of JPMorgan Chase.

As you can see, without those banks we do not have a financial system.

Our entire economy is based on debt, and if those banks were to disappear the flow of credit would dry up almost completely.  Without those banks, we would rapidly enter an economic depression unlike anything that the United States has seen before.

It is kind of like a patient that has such an advanced case of cancer that if you try to kill the cancer you will inevitably also kill the patient.  That is essentially what our relationship with these big banks is like at this point.

Unfortunately, since the last financial crisis the too big to fail banks have become even more reckless.  Right now, four of the too big to fail banks each have total exposure to derivatives that is well in excess of 40 TRILLION dollars.

Keep in mind that U.S. GDP for the entire year of 2012 was just 15.7 trillion dollars and the U.S. national debt is just 17 trillion dollars.

So when you are talking about four banks that each have more than 40 trillion dollars of exposure to derivatives you are talking about an amount of money that is almost incomprehensible.

Posted below are the figures for the four banks that I am talking about.  I have written about this in the past, but in this article I have included the very latest updated numbers from the U.S. government.  I think that you will agree that these numbers are absolutely staggering…

JPMorgan Chase

Total Assets: $1,947,794,000,000 (nearly 1.95 trillion dollars)

Total Exposure To Derivatives: $71,289,673,000,000 (more than 71 trillion dollars)

Citibank

Total Assets: $1,319,359,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $60,398,289,000,000 (more than 60 trillion dollars)

Bank Of America

Total Assets: $1,429,737,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $42,670,269,000,000 (more than 42 trillion dollars)

Goldman Sachs

Total Assets: $113,064,000,000 (just a shade over 113 billion dollars – yes, you read that correctly)

Total Exposure To Derivatives: $43,135,021,000,000 (more than 43 trillion dollars)

Please don't just gloss over those huge numbers.

Let them sink in for a moment.

Goldman Sachs has total assets worth approximately 113 billion dollars (billion with a little "b"), but they have more than 43 TRILLON dollars of total exposure to derivatives.

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 381 times greater than their total assets.

Most Americans do not understand that Wall Street has been transformed into the largest casino in the history of the world.  The big banks are being incredibly reckless with our money, and if they fail it will bring down the entire economy.

The biggest chunk of these derivatives contracts that Wall Street banks are gambling on is made up of interest rate derivatives.  According to the Bank for International Settlements, the global financial system has a total of 441 TRILLION dollars worth of exposure to interest rate derivatives.

When that Ponzi scheme finally comes crumbling down, there won't be enough money on the entire planet to fix it.

We had our warning back in 2008.

The too big to fail banks were in the headlines every single day and our politicians promised to fix the problem.

But instead of fixing it, the too big to fail banks are now 37 percent larger and our economy is more dependent on them than ever before.

And in their endless greed for even larger paychecks, they have become insanely reckless with all of our money.

Mark my words – there is going to be a derivatives crisis.

When it happens, we are going to see some of these too big to fail banks actually fail.

At that point, there will be absolutely no hope for the U.S. economy.

We willingly allowed the too big to fail banks to become the core of our economic system, and now we are all going to pay the price.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/EjgxrTyBR2Q/story01.htm Tyler Durden

On November 1st, 1961, an agreement was reached between the central banks of the United States and seven European countries to cooperate in achieving a shared, and very clearly stated, aim.

The agreement became known as the London Gold Pool, and it had a very explicit purpose: to keep the price of gold suppressed “under control” and pegged regulated at $35/oz. through interventions in the London gold market whenever the price got to be a little… frisky.

The construct was a simple one.

The eight central banks would all chip in an amount of gold to the initial “kitty.” Then they would sell enough of the pooled gold to cap any price rises and then replace that which they had been forced to sell on any subsequent weakness.

 

*Statement is subject to standard terms and conditions and is not necessarily reflective of any evidence. Government entities are excluded from inclusion based on the fact that we can't really do anything about them and anyway; they could put us out of business; and it would make things really, really bad for them. Also, bullion banks are not covered under this statement because we were told to turn a blind eye; but individual investors are, and we can categorically confirm that, to the best of our knowledge, no individuals are manipulating the precious metals markets (at this time).

But, as Grant Williams explains in this excellent and complete summary of the history of Gold price manipulation, things don't always go as planned…

Human beings, when given means and motive, have rather a poor history of eschewing the easy profit in favour of doing the right thing. Governments, when faced with dilemmas, have a rather poor history of doing the right thing as opposed to whatever they think they need to do in order to cling to power. It's quite simple.

 

Libor, FX rates, and mortgages trades are all fiat in nature. The contracts that are exchanged have no tangible value. (Yes, technically speaking, mortgages have houses underneath them, but the houses are so far down the securitization chain as to be invisible). Such contracts can be created at the push of a button or the stroke of a pen and manipulated easily right up until the point where they can't.

 

Gold is a different beast altogether.

 

The manipulation of the gold price takes place in a paper market — away from the physical supply of the metal itself. That metal trades on a premium to the futures contract for a very good reason: it has real, intrinsic value, unlike its paper nemesis.

 

If you want to manipulate the price of a paper futures contract lower, you simply sell that paper. Sell it long, sell it short, it doesn't matter — it is a forward promise. You can always roll it over at a later date or cover it back at a profit if the price moves lower in the interim.

 

And of course you can do it on margin.

 

If the trading were actually in the metal itself, then in order to weaken the price you would have to continue to find more physical metal in order to continue selling; and, as is welldocumented, there just isn't so much of it around: in recent years what little there is has been pouring into the sorts of places from which it doesn't come back — not at these price levels, anyway.

 

The London Gold Pool had one thing in common with the rigging of the FX, Libor, and mortgage markets: it worked until it didn't.

 

The London Gold Pool proved that central banks can collude cooperate to rig maintain the price of gold at what they deem manageable levels, but it also proved that at some point the pressure exerted by market forces to restore the natural order of things becomes overwhelming, and even the strongest cartels groups (whose interests happen to be aligned) — which are made up of the very institutions granted the power to create money out of thin air — can't fight the battle any longer.

 

 

…The problem now is that currently there are almost 70 claims on every ounce of gold in the COMEX warehouse and serious doubts about the physical metal available for delivery at the LBMA.

 

Which leads us to today…

The London Gold Pool was designed to keep the price of gold capped in an era when the world's reserve currency had a tangible backing. In defending the price, the eight members of the Pool were forced to sell way more gold than they had initially contributed in order to keep the price from going where it desperately wanted to go — higher.

 

This time around, the need for the price to be capped has nothing to do with any kind of gold standard and everything to do with the defense of the fractional reserve gold lending system, about which I have written and spoken many times.

 

Gold is moving to ever stronger hands, and when the dam does inevitably break again, the true price will be discovered by natural market forces, free of interference.

 

This time, however, those chasing what little gold is available will include all those central banks that have kept their holdings "safe" in overseas vaults.

 

The Bundesbank has seen the writing on the wall and demanded its gold back. They were told it would take seven years before their 30 tonnes could be returned to them.

 

My guess is, this little scheme doesn't have seven years left to play out.

 

Everybody outta the pool!

Full Grant Williams letter here:

TTMYGH Twisted (by the Pool)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/8MVuUw3ANf0/story01.htm Tyler Durden

“Eventually, the whole world is going to collapse,” Jim Rogers chides a disquieted CBC anchor as he explains the reality that, “we in the West have staggering debts. The United States is the largest debtor nation in the history of the world,” adding that “this is going to end badly.”

However, the co-founder of Soros’ Quantum fund is convinced that the commodity super-cycle is far from over, but driven by supply constraints (and cost increases) as opposed to demand from higher growth. The following interview provides more color on his commodity view as he re-iterates his bullish stance on Ag (with sugar a focus) and Natural Gas (some harsh natural realities coming), warning “don’t get too excited about fracking,” when he talks energy products.

Rogers, in his inimitable way, sums up the state iof euphoria that many markets find themselves in thus, “we are all floating around on a sea of artificial liquidity right now. This is not going to last.”

 

On the end of the commodity super-cycle:

“Commodities have pulled back, but I would remind you that in all bull markets there are periods of correction.

 

In 1987 – during the great bull market in stocks – stocks went down 40 to 80 per cent around the world; again in 1989, 1990, 1994, etc. Every time people said the bull market’s over, but it wasn’t. I think that’s what’s happening with commodities now.”

On the next crisis:

“2008 was so much worse than 2000 because the debt was so much higher, you wait until 2014 or 2015 when the next crisis hits…

 

debt has gone through the roof, the next one’s gonna be really bad“

His final words:

“Be prepared, be worried, and be careful“

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/UtlFJ3c76Zc/story01.htm Tyler Durden

“Eventually, the whole world is going to collapse,” Jim Rogers chides a disquieted CBC anchor as he explains the reality that, “we in the West have staggering debts. The United States is the largest debtor nation in the history of the world,” adding that “this is going to end badly.”

However, the co-founder of Soros’ Quantum fund is convinced that the commodity super-cycle is far from over, but driven by supply constraints (and cost increases) as opposed to demand from higher growth. The following interview provides more color on his commodity view as he re-iterates his bullish stance on Ag (with sugar a focus) and Natural Gas (some harsh natural realities coming), warning “don’t get too excited about fracking,” when he talks energy products.

Rogers, in his inimitable way, sums up the state iof euphoria that many markets find themselves in thus, “we are all floating around on a sea of artificial liquidity right now. This is not going to last.”

 

On the end of the commodity super-cycle:

“Commodities have pulled back, but I would remind you that in all bull markets there are periods of correction.

 

In 1987 – during the great bull market in stocks – stocks went down 40 to 80 per cent around the world; again in 1989, 1990, 1994, etc. Every time people said the bull market’s over, but it wasn’t. I think that’s what’s happening with commodities now.”

On the next crisis:

“2008 was so much worse than 2000 because the debt was so much higher, you wait until 2014 or 2015 when the next crisis hits…

 

debt has gone through the roof, the next one’s gonna be really bad“

His final words:

“Be prepared, be worried, and be careful“

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/UtlFJ3c76Zc/story01.htm Tyler Durden

Submitted by F.F.Wiley of Cyniconomics blog,

As we noted last month, President Obama sat down for an interview with Chuck Todd on November 7 and said:

You know, one of the lessons — learned from this whole process on the website — is that probably the biggest gap between the private sector and the federal government is when it comes to I.T. … Well, the reason is is that when it comes to my campaign, I’m not constrained by a bunch of federal procurement rules, right? …When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost.

Well, this week we learned that the gap’s been closed. The Department of Health and Human Services (HHS) told us so. In its official, December 1 “Progress and Performance Report” on the Obamacare website, HHS not only announced that it had “met the goal of having a system that will work smoothly for the vast majority of users,” but wrote that “the team is operating with private sector velocity and effectiveness.” That sure was quick.

 

Sarcasm aside, we found it hard to read HHS’s eight page document without cringing. Needless to say, it’s not a genuine “progress and performance” report. It’s not even close.

Consider that shortly after accepting his position as website czar in October, Jeffrey Zientz let us know that he’s working from a list of problems on a “punch list,” which included over 100 issues according to an anonymous spokesperson. Zientz added that the system’s failure to deliver accurate reports to insurance companies was at the top of the list. This seems a reasonable prioritization, right? If the exchange can’t deliver the necessary information to insurance companies, the whole process collapses. But HHS’s report doesn’t even mention this critical problem.

And how about measures to protect website users’ personal information, which are widely reported to be full of holes? Again, not a word.

You won’t find expense figures, either, which is unfortunate in light of Bloomberg’s analysis showing that the largest 10 contractors were already paid an astounding $1 billion. Considering the administration’s private sector aspirations, the absence of any information on the website’s soaring costs seems a conspicuous omission.

Instead of checking off accomplishments against what still needs fixing, while revealing the taxpayers’ bill, HHS’s report combines vacuous “achievements” such as “2X a day standup war room meetings” with unverifiable statistics for response times, capacity, error rates, uptime and software fixes. The report reads like a baseball team’s declaration of success on its spring training goals of learning each others’ names, knowing which base is which and memorizing the infield fly rule. We don’t doubt there’s been some improvement in the metrics, but it’s unlikely that the last two months’ progress gets the website to much better than inadequate, from its earlier status of epically inadequate.

Worse still, HHS seems to think we take their propaganda seriously. Displaying #AskJPM-like ignorance of how the administration is perceived, they act as if we believe what we’re told. On the contrary, there seems only a shrinking minority of loyalists who still trust the official narratives, as shown by Obama’s plummeting approval ratings. Those who weren’t predisposed to disbelieve empty rhetoric probably tuned out at “you can keep your plan if you like it.”

And while we may never know the true extent of the administration’s deceptions, here are a few links to information that Zientz doesn’t want you to have:

• CNN reports that “the White House is exerting massive pressure on the industry, including the trade associations to keep quiet … insurance executive feel defenseless against the White House PR team … the insurance companies are in a position to just be quiet for fear of offending basically their biggest source of income.”
• In one of what we suspect are multiple methods of inflating its enrollment counts, HHS flouts industry standards by including “enrollees” who didn’t complete the process by continuing to the payment step. This detail is, of course, absent from official reports. (It was shared with the Washington Post by anonymous sources.)
• Prior to and immediately after the website’s October 1 launch, HHS head Karen Sebelius kept a close wrap on all sorts of critical information, including the website’s developmental progress, initial effectiveness, the true reasons for its early breakdowns, and expenses (which were only revealed through Bloomberg’s analysis linked above and other third-party estimates).
• This last link comes off as a total non sequitur, but I’ll share it anyway because I read the NSA’s Thanksgiving memo on the same day as HHS’s report and it was the combination of these two gems that motivated me to get this post out. As discussed here by Tyler Durden and Monty Pelerin, there’s a common thread running through this year’s Obamacare and NSA revelations. In case you missed the NSA’s latest, the institution’s leaders took it upon themselves to guide employees on how they should speak with friends and family over the holidays. Just when I thought we’d reached peak weirdness with NSA head Keith Alexander’s Starship Enterprise control room designs and porn use monitoring, the information gets even weirder.

Getting back to the administration’s claim to have closed the gap between public and private sector effectiveness, here are relevant links to a few articles about the key players involved:

• The firm that was awarded the new general contractor role for the website, QSSI, was quietly purchased (no press releases were issued) in 2012 by our largest health insurance firm, UnitedHealth Group. This occurred not long after a top HHS health care regulator took a new position at the UnitedHealth subsidiary that acquired QSSI. As you might expect, it triggered congressional inquiries about the glaring conflicts of interest, which changed nothing.
• QSSI was granted its enlarged role despite complicity in the website’s launch disaster and serious questions about its ability to protect sensitive data, as demonstrated by an HHS Inspector General audit earlier this year.
• UnitedHealth Executive Vice President Andrew Welters and his family are big-time donors and fundraisers for Obama, with OpenSecrets.org reporting amounts of between $500,000 and $1,000,000. Welter’s wife was rewarded with a plush ambassadorship to Trinidad and Tobago. Maybe we can fill in the blanks on Welter’s reward.
• White House visitor logs show a series of appearances in recent years by Toni Townes-Whitley, a senior executive at CGI Federal, the firm with the largest website contract until QSSI’s recent mandate. These visits were both professional and personal, weekday and weekend, and one of them included a photo with the Obama’s at a Christmas gathering. The professional visits were surely related to CGI Federal’s government business and included a meeting with the principal deputy Obamacare commissioner. The personal visits were explained by Townes-Whitley and Michelle Obama being old college friends, having graduated from Princeton in the same year with involvement in the same extra-curricular groups.
• Among many recent reports of CGI Federal’s shortcomings, Newsweek published an article that includes details of “potentially aggressive bookkeeping,” “weak disclosure practices,” a whistleblower suit alleging violations of SEC fraud rules, and botched government contracts in its AMS unit.
• In the bigger picture of all outsourced Obamacare contracts, the Sunlight foundation showed that the disastrous launch may be explained by the fact that the work was divvied up among 47 contractors, all but one of which was known to the government through past mandates. Disclosures by 17 of those contractors reveal that their lobbying expenses in 2011 and 2012 totaled $128 million.

Reviewing these facts, I suppose HHS could support their claim to “private sector velocity and effectiveness” with some semantic tricks. If you interpret that phrase as referring to the principle contractors’ adeptness at winning huge, no-bid contracts through personal connections, donations, fund raising and lobbying, then it all adds up.

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

Submitted by F.F.Wiley of Cyniconomics blog,

As we noted last month, President Obama sat down for an interview with Chuck Todd on November 7 and said:

You know, one of the lessons — learned from this whole process on the website — is that probably the biggest gap between the private sector and the federal government is when it comes to I.T. … Well, the reason is is that when it comes to my campaign, I’m not constrained by a bunch of federal procurement rules, right? …When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost.

Well, this week we learned that the gap’s been closed. The Department of Health and Human Services (HHS) told us so. In its official, December 1 “Progress and Performance Report” on the Obamacare website, HHS not only announced that it had “met the goal of having a system that will work smoothly for the vast majority of users,” but wrote that “the team is operating with private sector velocity and effectiveness.” That sure was quick.

 

Sarcasm aside, we found it hard to read HHS’s eight page document without cringing. Needless to say, it’s not a genuine “progress and performance” report. It’s not even close.

Consider that shortly after accepting his position as website czar in October, Jeffrey Zientz let us know that he’s working from a list of problems on a “punch list,” which included over 100 issues according to an anonymous spokesperson. Zientz added that the system’s failure to deliver accurate reports to insurance companies was at the top of the list. This seems a reasonable prioritization, right? If the exchange can’t deliver the necessary information to insurance companies, the whole process collapses. But HHS’s report doesn’t even mention this critical problem.

And how about measures to protect website users’ personal information, which are widely reported to be full of holes? Again, not a word.

You won’t find expense figures, either, which is unfortunate in light of Bloomberg’s analysis showing that the largest 10 contractors were already paid an astounding $1 billion. Considering the administration’s private sector aspirations, the absence of any information on the website’s soaring costs seems a conspicuous omission.

Instead of checking off accomplishments against what still needs fixing, while revealing the taxpayers’ bill, HHS’s report combines vacuous “achievements” such as “2X a day standup war room meetings” with unverifiable statistics for response times, capacity, error rates, uptime and software fixes. The report reads like a baseball team’s declaration of success on its spring training goals of learning each others’ names, knowing which base is which and memorizing the infield fly rule. We don’t doubt there’s been some improvement in the metrics, but it’s unlikely that the last two months’ progress gets the website to much better than inadequate, from its earlier status of epically inadequate.

Worse still, HHS seems to think we take their propaganda seriously. Displaying #AskJPM-like ignorance of how the administration is perceived, they act as if we believe what we’re told. On the contrary, there seems only a shrinking minority of loyalists who still trust the official narratives, as shown by Obama’s plummeting approval ratings. Those who weren’t predisposed to disbelieve empty rhetoric probably tuned out at “you can keep your plan if you like it.”

And while we may never know the true extent of the administration’s deceptions, here are a few links to information that Zientz doesn’t want you to have:

• CNN reports that “the White House is exerting massive pressure on the industry, including the trade associations to keep quiet … insurance executive feel defenseless against the White House PR team … the insurance companies are in a position to just be quiet for fear of offending basically their biggest source of income.”
• In one of what we suspect are multiple methods of inflating its enrollment counts, HHS flouts industry standards by including “enrollees” who didn’t complete the process by continuing to the payment step. This detail is, of course, absent from official reports. (It was shared with the Washington Post by anonymous sources.)
• Prior to and immediately after the website’s October 1 launch, HHS head Karen Sebelius kept a close wrap on all sorts of critical information, including the website’s developmental progress, initial effectiveness, the true reasons for its early breakdowns, and expenses (which were only revealed through Bloomberg’s analysis linked above and other third-party estimates).
• This last link comes off as a total non sequitur, but I’ll share it anyway because I read the NSA’s Thanksgiving memo on the same day as HHS’s report and it was the combination of these two gems that motivated me to get this post out. As discussed here by Tyler Durden and Monty Pelerin, there’s a common thread running through this year’s Obamacare and NSA revelations. In case you missed the NSA’s latest, the institution’s leaders took it upon themselves to guide employees on how they should speak with friends and family over the holidays. Just when I thought we’d reached peak weirdness with NSA head Keith Alexander’s Starship Enterprise control room designs and porn use monitoring, the information gets even weirder.

Getting back to the administration’s claim to have closed the gap between public and private sector effectiveness, here are relevant links to a few articles about the key players involved:

• The firm that was awarded the new general contractor role for the website, QSSI, was quietly purchased (no press releases were issued) in 2012 by our largest health insurance firm, UnitedHealth Group. This occurred not long after a top HHS health care regulator took a new position at the UnitedHealth subsidiary that acquired QSSI. As you might expect, it triggered congressional inquiries about the glaring conflicts of interest, which changed nothing.
• QSSI was granted its enlarged role despite complicity in the website’s launch disaster and serious questions about its ability to protect sensitive data, as demonstrated by an HHS Inspector General audit earlier this year.
• UnitedHealth Executive Vice President Andrew Welters and his family are big-time donors and fundraisers for Obama, with OpenSecrets.org reporting amounts of between $500,000 and $1,000,000. Welter’s wife was rewarded with a plush ambassadorship to Trinidad and Tobago. Maybe we can fill in the blanks on Welter’s reward.
• White House visitor logs show a series of appearances in recent years by Toni Townes-Whitley, a senior executive at CGI Federal, the firm with the largest website contract until QSSI’s recent mandate. These visits were both professional and personal, weekday and weekend, and one of them included a photo with the Obama’s at a Christmas gathering. The professional visits were surely related to CGI Federal’s government business and included a meeting with the principal deputy Obamacare commissioner. The personal visits were explained by Townes-Whitley and Michelle Obama being old college friends, having graduated from Princeton in the same year with involvement in the same extra-curricular groups.
• Among many recent reports of CGI Federal’s shortcomings, Newsweek published an article that includes details of “potentially aggressive bookkeeping,” “weak disclosure practices,” a whistleblower suit alleging violations of SEC fraud rules, and botched government contracts in its AMS unit.
• In the bigger picture of all outsourced Obamacare contracts, the Sunlight foundation showed that the disastrous launch may be explained by the fact that the work was divvied up among 47 contractors, all but one of which was known to the government through past mandates. Disclosures by 17 of those contractors reveal that their lobbying expenses in 2011 and 2012 totaled $128 million.

Reviewing these facts, I suppose HHS could support their claim to “private sector velocity and effectiveness” with some semantic tricks. If you interpret that phrase as referring to the principle contractors’ adeptness at winning huge, no-bid contracts through personal connections, donations, fund raising and lobbying, then it all adds up.

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

Pew noted yesterday:

Support for U.S. global engagement, already near a historic low, has fallen further.

 

***

 

The [American] public thinks that the nation does too much to solve world problems, and increasing percentages want the U.S. to “mind its own business internationally” and pay more attention to problems here at home.

 

***

 

These are among the principal findings of America’s Place in the World, a quadrennial survey of foreign policy attitudes conducted in partnership with the Council on Foreign Relations (CFR), a nonpartisan membership organization and think tank specializing in U.S. foreign policy.

 

***

 

The public’s skepticism about U.S. international engagement – evident in America’s Place in the World surveys four and eight years ago – has increased. Currently, 52% say the United States “should mind its own business internationally and let other countries get along the best they can on their own.” Just 38% disagree with the statement. This is the most lopsided balance in favor of the U.S. “minding its own business” in the nearly 50-year history of the measure.

 

***

 

After the recent near-miss with U.S. military action against Syria, the NATO mission in Libya and lengthy wars in Afghanistan and Iraq, about half of Americans (51%) say the United States does too much in helping solve world problems, while just 17% say it does too little and 28% think it does the right amount. When those who say the U.S. does “too much” internationally are asked to describe in their own words why they feel this way, nearly half (47%) say problems at home, including the economy, should get more attention.

As we’ve reported for years, the American public is sick of war.

Pew notes that even members of the Council on Foreign Relations agree:

When asked why the public has become less supportive of global engagements, 42% of CFR members point to the wars in Iraq and Afghanistan, or explicitly cite “war fatigue.” About a quarter (28%) mention the struggling U.S. economy or the costs of international engagement. Other factors cited are the ineffectiveness of recent U.S. interventions (mentioned by 19%) and failures of U.S. leadership (17%). (For more on how members of the Council on Foreign Relations view America’s Place in the World, see section 6).

Because war is bad for the economy and increases terrorism, it’s time to listen to the American people … and the Founding Fathers.

 

Bonus:  

They’re Going to Dump the Fukushima Radiation Into the Ocean

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Oy7FWhSLyG4/story01.htm George Washington

Getting paid miserable wages? Don’t fret – just buy the stock of your (hopefully public) employer, and hope and pray that this time is different, and that light at the end of the tunnel is the not the next latest and greatest (and likely last) stock market collapse, in the ultimate trade off of current pay for capital gains: 19 quarters in and Labor Compensation is flat with where it was when the Great Financial Crisis began but, more crucially, employee compensation is at its lowest on record relative to corporate profits.

 

 

As we previously noted,

For those curious what the reason for records corporate profits is (or rather was: we have now finally turned the cycle and Y/Y profit growth is, for the first time since 2009, finally negative), the chart below explains it all.

 

It also explains why 401(k) plans are now redundant: anyone who wishes to keep up with the growth rate of their employer has no choice but to buy their stock, and generate returns for all shareholders. Because corporations, people or not, now have all the leverage.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/UusACE_6W2M/story01.htm Tyler Durden

"In order for currencies to be 'exchangeable' they have to be backed by something," is the remarkably ironic initial comment from none other than debaser-of-the-entirely-fiat-dollar Alan Greenspan when asked about the "bubble in bitcoin," by Bloomberg TV's Trish Regan. Unable to "identify the intrinsic" backing of Bitcoin (or see bubbles in equity, credit, real estate, or greater fools) Greenspan is, apparently, capable of identifying Bitcoin "as a bubble," because "there is no fundamental means of "repaying' it by any means that is universally accepted." The farcical double-speak continues as the Maestro does a great job of making Bitcoin (which Ron Paul earlier noted could be the "destroyer of the dollar") look even better than the readily-printed fiat we meddle with every day.

Greenspan explains…

"when we were on the gold standard, [currencies] had intrinisc value which made people willing to exchange their goods and services with no question."

"Alternatively, when we went into "currencies", it was the "backing" of the issuer of the currencies… whose "great credit-standing meant his checks could circulate as money.""

So either its backed by real physical metal with intrinsic value – or the promise of someone…(increasingly politicians of course) with good credit (or a big army)?

"I do not understand where the backing of Bitcoin is coming from. There is no fundamental means of "repaying' it by any means that is universally accepted."

Like fiat currencies (just ask the Venezuelans)…

"Individuals with very high net worth and great reputations could create their own currency… because people would be willing to exchange their checks with each other at par."

So coming soon the BuffettCoin or MuskCoin (oh wait reputation), or the GatesCoin?

But, Greenspan sums it all up…

"I haven't been able to identfy the intrinsic value of Bitcoin – maybe someone else can…

but if you ask me if this is a bubble in bitcoin… yeah it's a bubble.

Which ironically (perfectly circular) is exactly what Bernanke said about gold…

• BERNANKE SAYS `NOBODY REALLY UNDERSTANDS GOLD PRICES'

 

So – after that – go buy his book!?

 

And some more color from Ron Paul on Bitcoin as "destroyer of the US Dollar":

Via Mike Krieger's Liberty Blitzkrieg blog,

While we believe it is the Federal Reserve that is systematically destroying the US dollar, Bitcoin could merely be the preferred conduit through which fed up citizens decide to express their displeasure with the incredibly corrupt corporatist-facist state being shoved down our throats by a handful of insane and greedy oligarchs. Interesting comments nonetheless. From CNN Money:

Imagine a world in which you can buy anything in secret. No banks. No fees. No worries inflation will make today’s money worth less tomorrow.

 

The digital currency Bitcoin promises all these things. And while it’s far from achieving any of them — its value is unstable and it’s rarely used — some have high hopes.

 

“There will be alternatives to the dollar, and this might be one of them,” said former U.S. congressman Ron Paul. If people start using bitcoins en masse, “it’ll go down in history as the destroyer of the dollar,” Paul added.

 

It’s unlikely that Bitcoin would replace the dollar or other government-controlled currencies. But it could serve as a kind of universal alternative currency that is accepted everywhere around the globe. Concerned about the dollar’s inflation? Just move your cash to bitcoins and use them to pay your bills instead. Tired of hefty credit card fees? Bitcoin allows transactions that bypass banks.

 

“That’s the holy grail for people who believe in freer markets and currency,” said Adam Gurri, a libertarian economics writer in New York.

 

There are no middlemen charging fees to move money between users. You can transfer bitcoins — even infinitesimally small fractions of one — directly to others’ digital wallets.

 

But don’t expect governments and banks to let Bitcoin take over so easily. Financial institutions will lose business if people stop using their payment systems, and central banks like the U.S. Federal Reserve would lose their ability to help slow and speed up economic activity. Paul expects banks to lobby and authorities to crack down.

 

“Governments absolutely demand a monopoly on money and credit. They’re not going to give it up easily,” Paul warned. “They will come down hard.”

Interesting times…

Full article here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1Za2G53S3fQ/story01.htm Tyler Durden