Category: zerohedge

While in the “market”, in which both bad and good news once again send stocks to new ATH, newsflow no longer matters, the most irrelvant of all economic reports is the Fed’s beige book. It was thus not surprising to see stocks have absolutely zero reaction to a report which according to the Fed saw the US economy grow in every region of the US, bolstered by consumer spending, tourism, manufacturing and improving labor market. In fact: everything apparently is great. So great that one wonder why the Fed is still monetizing tens of billions every month and ZIRP is on the Fed’s calendar for at a year more.

Some of the highlights:

• The pace of economic growth was characterized as moderate in New York, Chicago, Minneapolis, Dallas, and San Francisco, while the remaining Districts reported modest expansion.

The difference between modest and moderate is still unclear.

• Overall consumer spending increased in every District. Retail sales grew modestly in most Districts, with increases that were generally similar to the previous reporting period. Vehicle sales remained stronger than non-auto retail sales, with Philadelphia, Richmond, Atlanta, and San Francisco indicating robust to very strong auto sales.
• Hotel contacts described robust activity in the Boston, New York, Atlanta, and Minneapolis Districts, while Philadelphia and Richmond noted activity levels that were in line with seasonal norms.
• Many Districts reported positive growth for professional and business services, including healthcare consulting, advertising, engineering, accounting, and technology.
• Manufacturing activity expanded in all twelve Districts.
• Reports on real estate activity varied across the Districts. Many Districts reported low inventories and increasing home prices, but demand was mixed. Boston, New York, and St. Louis reported home sales were below year-ago levels, while Chicago noted a decrease in home sales since the last survey period. Home sales in other Districts remained steady or increased.
• Loan volumes rose across the nation, with slight to moderate increases reported in most Districts.
• Most fall crops were reported in good or better condition, and expectations of higher production lowered crop prices. Profitability improved for livestock operators in the Atlanta, Minneapolis, and Kansas City Districts due to high cattle and hog prices. Oil production expanded in the Minneapolis, Kansas City, and Dallas Districts, while natural gas and coal production remained relatively steady in reporting Districts.
• Labor market conditions improved, as all twelve Districts reported slight to moderate employment growth. Several Districts continued to report some difficulty finding workers for skilled positions.
• Price pressures were generally contained, with most Districts reporting slight to modest price increases for both inputs and finished goods

And so on.

Perhaps the most informative data point however was that in counting instances of the following words:

• “Optimistic” or “optimism”: 24
• “Pessimism”: 1

… It appears Americans around the country took Obama’s advice to be less cynical and more full of hope.

via Zero Hedge http://ift.tt/1ysf5ur Tyler Durden

Stanley Druckenmiller is no stranger to the pages of Zero Hedge as he appears immune to the herd-like status-quo-hugging nature of 99% of the financial markets lackeys that strut on TV. His comments today – lengthy, aggressive, and very worried about what the Fed has done – can be summed up in the following chart and his ominous conclusion, “when the Fed ends QE, there’ll be a bear market.”

 

 

Source: SocGen

via Zero Hedge http://ift.tt/1l4imIi Tyler Durden

via Zero Hedge http://ift.tt/1jQ9nzI williambanzai7

Submitted by Michael Snyder of The Economic Collapse blog,

From our fields to our forks, huge corporations have an overwhelming amount of power over our food supply every step of the way.  Right now there are more than 313 million people living in the United States, and the job of feeding all of those people is almost entirely in the hands of just a few dozen monolithic companies.  If you do not like how our food is produced or you don’t believe that it is healthy enough, it isn’t very hard to figure out who is to blame.  These mammoth corporations are not in business to look out for the best interests of the American people.  Rather, the purpose of these corporations is to maximize wealth for their shareholders.  So the American people end up eating billions of pounds of extremely unhealthy food that is loaded with chemicals and additives each year, and we just keep getting sicker and sicker as a society.  But these big corporations are raking in big profits, so they don’t really care.

If we did actually have a capitalist system in this country, we would have a high level of competition in the food industry.  But instead, the U.S. food industry has become increasingly concentrated with each passing year.  Just consider the following numbers about the U.S. agricultural sector…

The U.S. agricultural sector suffers from abnormally high levels of concentration. Most economic sectors have concentration ratios around 40%, meaning that the top four firms in the industry control 40% of the market. If the concentration ratio is above 40%, experts believe competition can be threatened and market abuses are more likely to occur: the higher the number, the bigger the threat.

 

The concentration ratios in the agricultural sector are shocking.

 

-Four companies own 83.5% of the beef market.

 

-The top four firms own 66% of the hog industry.

 

-The top four firms control 58.5% of the broiler chicken industry.

 

-In the seed industry, four companies control 50% of the proprietary seed market and 43% of the commercial seed market worldwide.

 

-When it comes to genetically engineered (GE) crops, just one company, Monsanto, boasts control of over 85% of U.S. corn acreage and 91% of U.S. soybean acreage.

When so much power is concentrated in so few hands, it creates some tremendous dangers.

And many of these giant corporations (such as Monsanto) are extremely ruthless.  Small farmers all over America are being wiped out and forced out of the business by the predatory business practices of these huge companies…

Because farmers rely on both buyers and sellers for their business, concentrated markets squeeze them at both ends. Sellers with high market power can inflate the prices of machinery, seeds, fertilizers and other goods that farmers need for their farms, while powerful buyers, such as processors, suppress the prices farmers are paid. The razor-thin profit margins on which farmers are forced to operate often push them to “get big or get out”—expanding into mega-operations or exiting the business altogether.

Of course the control that big corporations have over our food supply does not end at the farms.

The distribution of our food is also very highly concentrated.  The graphic shared below was created by Oxfam International, and it shows how just 10 gigantic corporations control almost everything that we buy at the grocery store…

And these food distributors are often not very good citizens either.

For example, it was recently reported that Nestle is running a massive bottled water operation on a drought-stricken Indian reservation in California…

Among the windmills and creosote bushes of San Gorgonio Pass, a nondescript beige building stands flanked by water tanks. A sign at the entrance displays the logo of Arrowhead 100% Mountain Spring Water, with water flowing from a snowy mountain. Semi-trucks rumble in and out through the gates, carrying load after load of bottled water.

 

The plant, located on the Morongo Band of Mission Indians’ reservation, has been drawing water from wells alongside a spring in Millard Canyon for more than a decade. But as California’s drought deepens, some people in the area question how much water the plant is bottling and whether it’s right to sell water for profit in a desert region where springs are rare and underground aquifers have been declining.

Nestle doesn’t stop to ask whether it is right or wrong to bottle water in the middle of the worst drought in the recorded history of the state of California.

They have the legal right to do it and they are making large profits doing it, and so they are just going to keep on doing it.

Perhaps you are thinking that you can avoid all of these corporations by eating organic and by shopping at natural food stores.

Well, it isn’t necessarily that easy.

According to author Wenonah Hauter, the “health food industry” is also extremely concentrated…

Over the past 20 years, Whole Foods Market has acquired its competition, including Wellspring Grocery, Bread of Life, Bread & Circus, Food for Thought, Fresh Fields, Wild Oats Markets and others. Today the chain dominates the market because it has no national competitor. Over the past five years its gross sales have increased by half (47 percent) to $11.7 billion, and its net profit quadrupled to $465.6 million. One of the ways it has achieved this profitability is by selling conventional foods under the false illusion that they are better than products sold at a regular grocery store. Consumers falsely conclude that these products have been screened and are better, and they are willing to pay a higher price.

 

The distribution of organic foods is also extremely concentrated. A little-known company, United Natural Foods, Inc. (UNFI) now controls the distribution of organic and natural products. Publically traded, the company has a contract with Whole Foods and it is the major source of these products for the remaining independent natural food stores. This relationship has resulted in increasingly high prices for these foods. Small manufacturers are dependent on contracts with UNFI to get their products to market and conversely, small retailers often have to pay a premium price for products because of their dependence on this major distributor. Over the past five years, UNFI’s net sales increased by more than half (55.6 percent) $5.2. billion. Its net profit margin increased by 88 percent to $91 million.

Everywhere you look, the corporations are in control.

And this is especially true when you look at big food retailers such as Wal-Mart.

Right now, grocery sales account for about half of all business at Wal-Mart, and approximately one out of every three dollars spent on groceries in the United States is spent at Wal-Mart.

That is absolutely astounding, and it obviously gives Wal-Mart an immense amount of power.

In fact, if you can believe it, Wal-Mart actually purchases a billion pounds of beef every single year.

So the next time someone asks you where the beef is, you can tell them that it is at Wal-Mart.

On the restaurant side, the ten largest fast food corporations account for 47 percent of all fast food sales, and the love affair that Americans have with fast food does not appear to be in danger of ending any time soon.

Personally, if you do not like how these corporate giants are behaving, you can always complain.

But you are just one person among 313 million, and most of these big corporations are not going to consider the ramblings of one person to be of any significance whatsoever.

Collectively, however, we have great power.  And the way that we are going to get these big corporations to change is by voting with our wallets.

Unfortunately, the vast majority of Americans seem quite satisfied with the status quo.  So the population as a whole is likely going to continue to get sicker, fatter and less healthy with each passing year, and the big food corporations are going to keep becoming even more powerful.

via Zero Hedge http://ift.tt/1jQ90oI Tyler Durden

It appears the Federal Reserve is in full court press mode to jawbone the rational exuberance out of the stock markets… On the heels of Yellen’s largely ignored “stretched valuations” comments, Dallas Fed’s Fisher exclaims:

• DALLAS FED PRESIDENT FISHER SAYS ‘MARKETS ARE OVERSHOOTING’
• FISHER CONCERNED FED MAY ‘BE STAYING TOO LOOSE TOO LONG’
• FISHER: I DON’T THINK YOU SHOULD ‘POP’ A BUBBLE, BUT SHOULD LET SOME SPECULATIVE STEAM OUT OF MARKETS

His plan for this “letting out of steam” is to start shrinking the Fed balance sheet in October and raising rates early in 2015. Of course, what does the Fed know about bubbles? We are sure the spin will come soon that this is bullish as ‘froth’ will be removed and then the secular bull can go on (aside from the total and utter lack of liquidity in markets, small doors and large crowds do not make for good endings).

via Zero Hedge http://ift.tt/1wvrX09 Tyler Durden

Newly-released documents from Edward Snowden show that the British spy agency GCHQ has developed numerous offensive digital tools.

But what exactly are they doing with these dirty tricks?

We think it’s important to think through the specific possibilities, in order to gain an understanding of how pernicious these manipulations can be.

We quote verbatim (in black) the names and descriptions of some of these tools – some of which Glenn Greenwald didn’t highlight in his report.  We then provide descriptions in blue of potential misuses of such tools.

Then we discuss how likely such misuses really are.

TOOLS AND POTENTIAL MISUSES

Here are the actual dirty tricks in the British spy agencies toolkit, with hypothetical examples of potential misuses …

CHANGELING: Ability to spoof any email address and send email under that identity. Fake an email from a privacy advocate to make it look like he’s proposing terrorism.

SCRAPHEAP CHALLENGE: Perfect spoofing of emails from Blackberry targets. Fake an email from an opponent of  bailouts to the giant banks to make it look like she’s planning to bomb a bank.

BURLESQUE: The capacity to send spoofed SMS messages. Fake a message from an an anti-war writer to make it look like he’s planning to sabotage a military base.

IMPERIAL BARGE : For connecting two target phone together in a call. Fake a telephone connection to make it look like a critic of the president’s policies spoke with a leader of Al Qaeda.

BADGER : Mass delivery of email messaging to support an Information Operations campaign. Send out a fake, mass email pretending to be from a prominent whistleblower “admitting” that he’s mentally unstable, disgruntled, dishonest, vindictive and a Russian spy.

WARPATH: Mass delivery of SMS messages to support an Information Operations campaign.  Send out a fake, mass message from a targeted group calling for the murder of all Christians and Jews.

SPACE ROCKET: A programme covering insertion of media into target networks. Insert a video of underage girls on a whistleblower website. 

CLEAN SWEEP Masquerade Facebook Wall Posts for individuals or entire countries. Put up a bunch of fake wall posts calling for jihad on the Facebook page of a reporter giving first-hand reports of what’s really happening in a country that the U.S. has targeted for regime change.

HAVOK Real-time website cloning technique allowing on-the-fly alterations. Hack the website of a state politician who insists the government must respect the Constitution,  and post fake demands for a violent march on Washington, D.C.

SILVERLORD: Disruption of video-based websites hosting extremist content through concerted target discovery and content removal. Disrupt websites hosting videos espousing libertarian views.

SUNBLOCK: Ability to deny functionality to send/receive email or view material online. Block emails to reporters and the web functionality of a government insider who is about to go public on wrongdoing.

ANGRY PIRATE: A tool that will permanently disable a target’s account on their computer. Disable the accounts of a leading opponent of genetically modified foods.

PREDATORS FACE: Targeted Denial Of Service against Web Servers. Take down a website which is disclosing hard-hitting information on illegal government actions.

UNDERPASS: Change outcome of online polls. Change the results of an online poll from one showing that the American people overwhelmingly oppose a new war which is unnecessary for the defense of America’s national security to showing support for it.

GATEWAY: Ability to artificially increase traffic to a website. Make a website calling for more surveillance against the American people appear hugely popular.

BOMB BAY: The capacity to increase website hits, rankings. Make it look like a site praising praising Al Qaeda is popular among a targeted local population, when the locals actually despise violent Islamic fundamentalists.

SLIPSTREAM: Ability to inflate page views on websites. Make it appear that an article saying that the Constitution is “outdated” and “unrealistic in the post-9/11 world” is widely popular.

GESTATOR: Amplification of a given message, normally video, on popular multimedia websites (Youtube). Make a propaganda video – saying that Dear Leader will always help and protect us – go viral.

WHAT IS THE LIKELIHOOD OF MISUSE?

We don’t know which of the above hypothetically forms of misuse are actually occurring. However, as we wrote in February:

We’ve warned since 2009 (and see this) that the government could be launching cyber “false flag attacks” in order to justify a crackdown on the Internet and discredit web activists.

 

A new report from NBC News – based on documents leaked by Edward Snowden – appear to confirm our fears, documenting that Britain’s GCHQ spy agency has carried out cyber false flag attacks:

In another document taken from the NSA by Snowden and obtained by NBC News, a JTRIG official said the unit’s mission included computer network attacks, disruption, “Active Covert Internet Operations,” and “Covert Technical Operations.” Among the methods listed in the document were jamming phones, computers and email accounts and masquerading as an enemy in a “false flag” operation. The same document said GCHQ was increasing its emphasis on using cyber tools to attack adversaries.

Later that month, we noted:

A new report from NBC News shows that the British spy agency used “false flag attacks” and other dirty tricks:

British spies have developed “dirty tricks” for use against nations, hackers, terror groups, suspected criminals and arms dealers that include releasing computer viruses, spying on journalists and diplomats, jamming phones and computers, and using sex to lure targets into “honey traps.”

 

***

 

The agency’s goal was to “destroy, deny, degrade [and] disrupt” enemies by “discrediting” them, planting misinformation and shutting down their communications.

Sound familiar? It should:

Between 1956 and 1971, the FBI operated a program known as COINTELPRO, for Counter Intelligence Program. Its purpose was to interfere with the activities of the organizations and individuals who were its targets or, in the words of long-time FBI Director J. Edgar Hoover, to “expose, disrupt, misdirect, discredit or otherwise neutralize” them.

NBC continues:

[The agency] also uses “false flag” operations, in which British agents carry out online actions that are designed to look like they were performed by one of Britain’s adversaries.

 

***

 

JTRIG used negative information to attack private companies, sour business relationships and ruin deals.

 

***

 

Changing photos on social media sites and emailing and texting colleagues and neighbors unsavory information.

And reporter Glenn Greenwald noted that Snowden documents showed:

Western intelligence agencies are attempting to manipulate and control online discourse with extreme tactics of deception and reputation-destruction.

 

***

 

These agencies are attempting to control, infiltrate, manipulate, and warp online discourse …. Among the core self-identified purposes … are two tactics: (1) to inject all sorts of false material onto the internet in order to destroy the reputation of its targets; and (2) to use social sciences and other techniques to manipulate online discourse and activism to generate outcomes it considers desirable. To see how extremist these programs are, just consider the tactics they boast of using to achieve those ends: “false flag operations” (posting material to the internet and falsely attributing it to someone else), fake victim blog posts (pretending to be a victim of the individual whose reputation they want to destroy), and posting “negative information” on various forums.

 

***

 

The discussion of many of these techniques occurs in the context of using them in lieu of “traditional law enforcement” against people suspected (but not charged or convicted) of ordinary crimes or, more broadly still, “hacktivism”, meaning those who use online protest activity for political ends.

 

The title page of one of these documents reflects the agency’s own awareness that it is “pushing the boundaries” by using “cyber offensive” techniques against people who have nothing to do with terrorism or national security threats, and indeed, centrally involves law enforcement agents who investigate ordinary crimes…. no conceivable connection to terrorism or even national security threats.

 

***

 

Then there is the use of psychology and other social sciences to not only understand, but shape and control, how online activism and discourse unfolds. Today’s newly published document touts the work of GCHQ’s “Human Science Operations Cell”, devoted to “online human intelligence” and “strategic influence and disruption”….***

 

Under the title “Online Covert Action”, the document details a variety of means to engage in “influence and info ops” as well as “disruption and computer net attack”, while dissecting how human beings can be manipulated using “leaders”, “trust, “obedience” and “compliance”:

The U.S. government is also spending millions to figure out how to manipulate social media to promote propaganda and stifle dissenting opinions. And see this and this.

And any criticism of government policies is now considered “extremist” and potential terrorism. According to Department of Defense training manuals, all protest is now considered “low-level terrorism”. And see this, this and this.  Questioning war is considered extremism. The government also considers anyone who tries to protect himself from government oppression and to claim his Constitutional rights a "extremist". This is not entirely new … the CIA director relabeled “dissidents” as “terrorists” so he could continue spying on them in 1972. Indeed – for 5,000 years straight – mass surveillance of one's own people has always been used to crush dissent.

The NSA is now also collecting and retaining the most intimate personal details of Americans, including nude and suggestive pictures and medical and financial records … even though they admittedly have no conceivable security value.

You may think you have “nothing to hide”, but you’re breaking the law numerous times every day … without even knowing it (update).

Indeed, top NSA whistleblowers say that the NSA is blackmailing and harassing opponents with information that it has gathered – potentially even high-level politicians – just like FBI head J. Edgar Hoover blackmailed presidents and Congressmen.

Moreover, if the NSA takes a dislike to someone, it can frame them. This has been CONFIRMED by top NSA whistleblowers.

And the following facts make it likely that British and U.S. spy agencies are misusing their powers:

• The Pentagon falsely smeared USA Today reporters who were investigating the use of illegal Pentagon propaganda against the American people

• The government and big banks joined forces to violently beat up peaceful protesters speaking out against bank corruption. Organizers of the protests say that their emails were blocked

• The NSA engages in offensive attacks (“we hack everyone everywhere“). And private corporations – big banks – will likely get the power to declare cyber war. Similarly, the largest German newspaper alleges that the U.S. government helped Monsanto attack the computers of activists opposed to genetically modified food

• The U.S. government at times uses national security powers to protect things other than the interests of the American people – such as globalism or global corporations (and may be putting foreign countries’ needs over our own) – and relies on countries which don’t even have a Constitution to justify unconstitutional acts. NSA’s recent actions are motivated by a power grab, not fighting terrorism

• Top NSA whistleblowers Bill Binney and Thomas Drake both say that the U.S. has become a police state. They say that the U.S. government has become like the Stasis or Soviets, Binney says that the NSA has become like “J. Edgar Hoover on super steroids” and that “the ultimate goal of the NSA is total population control“

Postscript: We don’t know whether or not the spy agencies are misusing their bag of tricks in the specific ways discussed above (in blue).  The whole point is that they have been caught lying time and again about what they’re doing, they’re running amok with no oversight, and the fact that they could be targeting government critics in exactly these ways shows how bad things have become.

via Zero Hedge http://ift.tt/1wvrV8z George Washington

President Barack Obama hosted Tuesday an Iftar at the White House in celebration of the Holy Month of Ramadan. The Iftar – the sixth to be hosted by Obama since he came to power in 2008 – has become an annual tradition at the White House, gathering diplomats from the Arab and Muslim world. We are sure that was not awkward at all for Obama…

 

via Zero Hedge http://ift.tt/Wb5lHg Tyler Durden

Wolf Richter   www.wolfstreet.com   http://ift.tt/Wz5XCn

Global M&A volume in the first half was the highest since 2007. It was led by the largest corporations, including GE, that borrowed for nearly free thanks to global ZIRP, to load up their balance sheet with spending money. Deal volume in the first half soared 75% to $1.75 trillion, closing in on the record set in 2007 of $2.28 trillion.

What was “notable,” according to Gregg Lemkau, co-head of global M&A at Goldman Sachs, was “the blue-chip nature of the companies who are doing the acquiring.”

What was even more notable was that the Great M&A Frenzy of 2007/2008 was followed by the Great Jobs Crisis that kicked off in earnest in 2009.

Deals are sold to investors on the basis of “creating value” with terms like “efficiencies” and “synergies” – code words for cost cutting and mass-layoffs. M&A jockeys like HP have lost sight of their business model and can only grow revenues, if at all, through endless acquisitions. Followed by layoffs. Sometimes they’re months apart, sometimes years. HP, after 11 quarters in a row of falling revenues, is still announcing waves of layoffs. A friend of mine, who came to HP via an acquisition of course, survived two waves of layoffs before the financial crisis, but was swept up in the third. Countless waves later, HP just announced another 16,000 layoffs on top of the 34,000 it had announced earlier.

Acquisitions, layoffs, and cost-cutting are the simplest things to do for a CEO, as opposed to inventing things and boosting sales organically, which is hard. And analysts eat them up. They call the dizzying expenses “non-cash charges” to be ignored, and they too decorate their pronouncements with “efficiencies” and “synergies.” Hence, a wave of acquisitions is invariably followed by cost-cutting, destruction of productive capacity, and layoffs.

Last September, Microsoft agreed to acquire Nokia’s mobile-phone business and promised $600 million in annual cost savings – the efficiencies and synergies – within 18 months. Now their meaning is becoming clear: “people who asked not to be identified because the plans aren’t public” told Bloomberg that the company is planning what might be the biggest wave of job cuts in its history.

Exact numbers weren’t mentioned, but Microsoft’s largest wave of layoffs happened during the financial crisis when it axed 5,800 people. Now, Satya Nadella, CEO since February, is putting his stamp on the company. Last week, he sent a professionally produced and designed memo to his “team,” the lucky ones who would be able to keep their jobs. It said in 3,000 words that big changes were coming to Microsoft. What it lacked in specifics, it made up for with glitz.

Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified.

With this memo, he wanted to “galvanize employees around what our soul is,” he said in a phone interview. That was a warning. But he refused to admit that the company was planning layoffs.

Layoffs are inevitable after acquisitions. Wall Street demands them. They’re used to rationalize the acquisitions in the first place. The lexicon of corporate euphemisms for axing people includes henceforth Nadella’s two gems, “Job responsibilities will evolve,” and “Processes will be simplified.”

A few M&A deals here and there may not have any measurable impact on the global economy though the layoffs still occur a few months or a year or two later. But when corporate mastodons buy each other out and merge with each other in relentless mega-waves, the resulting cost-cutting and layoffs will have an impact. And there have been 17,698 deals in the first half of this year alone!

But the delays between the deal announcement and the moment when employees are actually shown the door can be significant. Deals take time to complete, and nothing can happen until they’re complete. In complex deals, this can stretch to a year. When governments get involved, it can take even longer. Once the deal is complete, employees often stay on for a while. So the time from the peak of the M&A frenzy to rising unemployment claims can be so long that it’s all too easy to obscure the link between them.

Wall Street’s financial engineers and corporate CEOs alike relish brandishing terms like “synergies” and “Job responsibilities will evolve” to dazzle investors with hope and boost stock prices. But they want to make sure that the M&A frenzy that makes them and the players around them so rich doesn’t get blamed for a jobs crisis a year later. And the corporate lapdog media gush about “Merger Monday” and repeat the M&A lingo without pointing to the large-scale job destruction that the estimated 35,000 global deals this year will inevitably entail.

But the frenzy is starting to show up on the Fed’s radar. Chair Janet Yellen poked with her dull needle at bubbles in momentum stocks and leveraged loans, and threatened to end ZIRP sooner, and more rapidly “than currently envisioned.” Which would end the M&A frenzy. Fasten your seatbelts. Read…. Yellen Warns Investors

via Zero Hedge http://ift.tt/1yrLi5d testosteronepit

While we understand that there are many nuances in the ongoing illegal immigrant debate, and there are certainly two sides to every story, we can’t help but wonder if the US government granting a $50 million award to BCFS Health and Human Services to house “young illegal immigrants at the site of the current Palm Aire Hotel and Suites” in Weslaco, Texas is the best use of government funding. As KRGV reported, ” A center for unaccompanied minors set to open in Weslaco later this year will be the first of its kind in the nation, officials with a network of non-profits said.  A center for unaccompanied minors set to open in Weslaco later this year will be the first of its kind in the nation, officials with a network of non-profits said… Representatives with BCFS said the Palm Aire will undergo a multi-million dollar transformation.”

Perhaps the reason why the public’s attention has not only been picqued by this news, but has led to a broad wave of outrage, is that a cursory scan of the Hotel complex reveals accomodations which are inaccessible to millions of Americans, let alone “unaccompanied minor immigrants.”

BCFS has a prepared reason why it needs the funding:

BCFS runs a temporary detention center for young illegal immigrants at Lackland Air Force Base in San Antonio. BCFS began as an orphanage for Hispanic children in San Antonio in 1944

 

“Children … who weren’t able to go into other orphanages. They weren’t allowed at the white orphanages, they weren’t allowed at the African-American orphanages,” said Krista Piferrer, with BCFS external affairs

Perhaps it is true that the BCFS was overdue an expansion, but that does not explain the need for tens of millions for its purported relocation into what is effectively a resort that has tennis courts, swimming pools, and saunas? Because a quick glimpse at the website of the Palm Aire Hotel indeed reveals accomodation conditions that many Americans – the kind that actually pay taxes – would be delighted to spend the rest of their lives in:

Facility:

Guest room:

Gym:

Sauna:

Tennis court:

Hotel bar:

 

Who runs BSCF? Meet Kevin Dinnin, President and CEO.

Dinnin is the foremost expert in the nation on medical needs sheltering and integrating people  with disabilities into emergency planning. Mr. Dinnin serves as the President and CEO of BCFS; under his leadership BCFS has provided services to those affected by crisis and disaster around the world with an array of mental health, medical and human service programs.

 

Mr. Dinnin served as the project executive for the FEMA guidance for Functional Needs Support Services in General Populations shelters, published in 2010. Additionally, he has been credited with developing the most comprehensive training manual for sheltering persons with medical needs known to be in existence and for establishing and maintaining the largest medical shelter capacity of any state in the US as well as developing the Texas Medical Shelter Task Force.  He served as the commander of the Health and Medical Branch of Texas Task Force Ike following the devastating hurricane in 2008, and served as commander for the final Galveston shelter operation for those impacted by Hurricane Ike. Recently, Mr. Dinnin led an incident management team response to Haiti following the 2010 earthquake where he implemented the Incident Command System in one of the largest Haitian hospitals.

 

Additionally, Mr. Dinnin has held numerous appointments with the U.S. Department of Health and Human Services including a secretarial appointment to the National Advisory Committee on Terrorism following the September 11, 2001 attacks. He was selected by the Texas Division of Emergency Management to serve as Incident Commander of the West Texas Unified Command when more than 1,000 responders engaged in the FLDS incident in San Angelo, Texas.

In other words, a career government worker, who has extensive experience with the “proper” allocation of emergency funding. Or perhaps not.

The Gateway Pundit has more on this curious development:

The plan is to have the hotel ready for illegal alien children ages 12 to 17 by October 1st of this year, a mere two-and-half months from now. It is expected the average stay will be about fifteen days.

 

The Palm Aire Hotel and Suites currently advertises amenities such as two outdoor swimming pools—one Olympic sized—Jacuzzis, sauna, steam room, two racquetball courts, outdoor tennis courts, picnic area with grills and a fitness center with twenty machines and free weights.

 

Attracted to the space for outdoor recreation at the Palm Aire Hotel and Suites, BCFS spoke of building a soccer field at the hotel and adding a perimeter fence.

 

BCFS plans to employ 650 people at the Palm Aire Hotel and Suites, which would mean slightly over one worker per illegal alien child. According to the BCSF Website, the charity’s jobs pay from $10 to $45 per hour.

 

KRGV-TV quoted a BCFS spokeswoman about the purpose of buying the Palm Aire Hotel and Suites: “It’s going to be an intake facility, which serves as a lot like a hospital emergency room,” Krista Piferrer, BCFS VP External Affairs said. We’ve all seen the photos and the videos of children in crowded Border Patrol facilities. What this site is going to allow to happen is quickly move those children out of Border Patrol cells and triage them,” Piferrer said.”

 

BCFS plans for the facility to be “completely self-contained” with Piferrer telling KRGV-TV, ‘medical staff will be on hand so children with diseases or injuries will not be transferred to local hospitals.’

 

Piferrer told the Valley Morning Star the Palm Aire Hotel and Suites facility would ‘(provide) medical and mental health care, on-site educational programs, recreational programs and case management.’

The conclusion:

According to a Hidalgo County commissioner, the BCFS contract for the Palm Aire Hotel and Suites is an annual one worth $50 million per year. It is not part of the $3.7 billion emergency funding for the illegal alien invasion requested by the Obama administration as the bill hasn’t yet passed but it is a good indication of where the money will go.

Sadly, it is. Because when there is no strings attached money sloshing around the system, and when there is a sudden crisis that should certainly not be put to waste, what is assured is that the vast bulk of the funds will be almost certainly misappropriated, potentially making gentlemen like Dinnin exorbitantly rich (perhaps as reward for his years of service at DHHS), and at worst it will be misallocted with zero regard for the consequences: after all it is taxpayers who are paying for it.

And the last point is perhaps critical: because as noted above, the most disturbing revelation in this story is how painfully – for many – inequitable US public policy is and will be in the coming months and years as America’s immigrant problem is addressed. Because while one may argue that children, illegal immigrants or otherwise deserve amenities, one can also understand why, rightfully, many honest, taxpaying Americans ask: “why don’t we get comparable treatment by the government, at least we pay our taxes.”

That, and also the fundamental question nobody has addressed: if immigrants know they can expect such white glove treatment, will it make them more or less likely to cross the border?

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Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Here's a two-word summary of why the American healthcare system is fundamentally broken and cannot be fixed with policy tweaks: perverse incentives.

If you type sickcare in the custom search box on this site, you get 10+ pages of articles. I have covered healthcare/sickcare in depth for many years. I have many correspondents within the sector (doctors and nurses), and have paid the unsubsidized costs of insurance as an employer or as a self-employed worker for 30+ years.

Here are two charts and three stories of many I've published over the years:

ObamaCare: The Neutron Bomb That Will Decimate the U.S. Economy (November 21, 2013)

Greed + Cartels = U.S. Sickcare/ObamaCare (February 13, 2014)

Obamacare is a Catastrophe That Cannot Be Fixed (December 6, 2013)

The unsubsidized cost of Obamacare for two 60-year old healthy adults ($23,244 annually) for an inferior plan to what we had before exceeds the cost of rent or a mortgage for the majority of Americans. Please ponder this for a moment: buying healthcare insurance under Obamacare costs as much or more as buying a house.

Here's a two-word summary of why the American healthcare system is fundamentally broken and cannot be fixed with policy tweaks: perverse incentives. Physician Ishabaka provides a telling example of how perverse incentives operate beneath the surface of what patients (and clueless politicos) see:

Today I saw a 16 year old boy who weighed 310 pounds – the wave of the future – will have type II diabetes by his 20's, probably have at least one leg amputated by his 40's.

I got home – and there was a fax in my fax machine. It was from a medical device company, promoting their new machine which is used to test for peripheral autonomic neuropathy (a disease of the nerves). There was NO MENTION of how this device would help patients.

What WAS mentioned was that insurance and Medicare pay for this test, and that no pre-authorization is required. It was stated the average Medicare reimbursement is $200. The "C.P.T. code" – the code doctors use for billing insurance – for the test was included, and a statement that the device would return its initial cost within 3 months was included – also a statement that the test takes THREE MINUTES.

Now, $200 for three minutes work is pretty sweet. In all of medicine "doing things" pays more than "thinking". That's why surgeons on average earn twice or more the income of primary care doctors. Surgery isn't hard – if you can do carpentry, you can do surgery. The thinking is the hard part – but it doesn't pay.

 

Now – here's the crux of the matter – peripheral autonomic neuropathy is very common in diabetic patients – and we are having an explosion in the population of people with diabetes. Therefore there are a LOT of patients with peripheral autonomic neuropathy, and a lot more coming down the pipe. Seeing an established diabetic patient, going over their blood sugar results, other tests, diabetes medications, diet, and exercise takes 15 – 20 minutes and pays FAR LESS than $200 – but actually HELPS patients. This benefit has been scientifically proven.

 

As a general rule, medical tests should only be done if they are likely to HELP a patient – either due to the fact that they may guide treatment, or give the patient useful information – an example might be a test that shows a patient has incurable cancer with a life expectancy of three months (I have had to tell a guy this at least once, based on the results of my physical examination, which suggested cancer, and a CT scan, which revealed that the cancer originated in the pancreas, and had spread to the liver) the information doesn't affect the patient's treatment, but does help him arrange his life – i.e. that he should make sure his will is up to date, say goodbye to family and friends, etc.

 

Here is the deal – for 99.9% of diabetics there is NO TREATMENT for peripheral autonomic neuropathy, and NO BENEFIT for the patient to know if they have it or not. In other words, almost all the time – this test is completely and utterly useless. There are a small amount of diabetic patients with serious, treatable peripheral autonomic neuropathy – but in them, the diagnosis is best made by physical examination and symptoms – not by this test.

 

So there you have it – a worthless test that apparently Medicare and other health insurances WILL pay for, that I could use on a whole bunch of patients to make a LOT of money, in very little time.

 

In fact, Medicare pays about $50 – $60 for the established diabetic patient visit I referenced earlier – or about one quarter what I'd make from doing this worthless test. Not only could I test all my diabetic patients – if they tested negative, I could re-test them at yearly intervals, keep making my $200 a pop, all for no benefit whatever to my patients.

 

I thought this was the most crystal clear example of mal-investment in the health care field I've come across in some time. The fax is in my re-cycling bin, waiting to be picked up by the city today. I'm not buying one of the testing machines. Oh well – I'll never own an Porsche Turbo – and I love fast cars!

 

In conclusion – there are plenty of doctors who jump at this kind of profit-making opportunity – I know several. One in particular does an echocardiogram on EVERY SINGLE patient he admits to the hospital – he gets paid to read the results of the echocardiogram – which takes little time, and is very lucrative. An echocardiogram CAN be a very useful test in patients with certain heart conditions, or in who certain heart conditions are suspected (can confirm or refute the clinical suspicion – which can dramatically change the patient's treatment) – but an echocardiogram on EVERY patient is a rip-off, plain and simple.

I don't know how he gets away with it, but he does – he's a multimillionaire. I'm not. Sometimes I wonder who is the smarter doctor.

Meanwhile, elsewhere in the world, equivalent care is affordable. Since the advanced, developed nations of Taiwan and Japan both provide care for one-third of what the U.S. spends per person, we already know that fully 65% of what we spend on sickcare is waste, fraud, defensive medicine (i.e. medically worthless tests given to stave off future lawsuits), profiteering, racketeering and paper-shuffling.

Consider this report from correspondent Barry P.:

I've been visiting the Philippines and came down with an ear infection. I tried to allow my immune system do the work, but after 3 days of no improvement my wife dragged me to the hospital, Makati Medical Center (MMC). MMC is one of two-or-three hospitals that the well-to-do go to when the need arises. Just as modern as the average US city-hospital. I have no health insurance in The Philippines.

The doctor spoke excellent English. The tools and technique used was pretty much as I expected (having had a history of ear infections in life). The US dollar cash price (after the exchange rate) I paid was $18.44 for the office visit and $30.54 for one weeks worth antibiotics, a vial of ear drops, and five pills for pain (as needed). A week later, I'm OK; no infection, no pain.

 

So for less than $50, the amount around the "US-sickcare" co-pay, I'm done.

 

Let that sink in.

 

The US medical cartel has a racket, eh? But we know that.

I have direct experience of similar costs in Thailand and China for care that was as good or better than in the U.S. (i.e. minimal waiting and paperwork, caregivers were polite, care was efficient, test machines of the exact same type and brand as in the U.S., etc.).

Correspondent M. submitted this report on the change in U.S. healthcare from a non-profit community-based hospital system to a centralized profit machine:

I reviewed this same topic with 3 different MD practitioners in recent months and ALL said the same thing!… namely, that medical care transitioned from local community MD non-profit run, into psychopath MBA profit run (at the hospital level) starting in the 1970s. They emphasized or gave examples of how the effective local non-profit MD run community hospital was taken over by for profit MBAism, typically with huge buyouts of the previous MD non-profit operators. Medical care became just another avenue for system wide racketeering via transition from local to larger system (i.e. racketeering).

The solution as you say: return to local community.

Large-scale rackets like sickcare cannot survive without a Central State that collects taxes and funnels the proceeds to the racketeers, who of course have bought political influence with their plundered profits. This is a self-reinforcing system that cannot be reformed in any meaningful way. It will bankrupt the nation and then we'll have a chance to start over with an affordable, efficient, fair system that is focused on prevention and health rather than profiting from disease, fraud and lawsuits

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