Stock Of Largest Austrian Bank Crashes After Revealing 40% Surge In Bad Debt Provisions, Record Loss

Ever since 2012, when we first revealed that the biggest problem plaguing Europe’s financial sector is the $2 trillion+ in bad debt on the books of European banks (not our numbers, the IMF’s), it became clear that the only way Europe can avoid a complete financial meltdown coupled with currency disintegration, is if it can constantly keep rolling over said bad debt (obviously the only way to do that would be to create an epic debt bubble leading managers of other people’s money to do idiotic things like buy Spanish debt at 2.75%). This is why not only the BOJ launched its mega QE in 2013, but why Draghi also kicked in with NIRP a month ago: the logic – do anything and everything to reflate the biggest credit bubble possible as otherwise European banks will have no choice but to face up to their trillions in bad loans.

Unfortunately for some banks, especially those which operate in Europe’s supposedly highest-rated country, Austria, sometimes just being able to kick the can is not enough as on occasion a law will change, having the unintended consequence of forcing the bank to admit just how ugly its balance sheet truly is. That’s what happened overnight when Erste Group, Austria’s largest bank by assets, and the third biggest bank in Eastern Europe after UniCredit and Raiffeisen, announced that, oops, its earlier forecast about the amount of bad loans on its books is wrong, and will have to rise by a massive 40%, leading to what will be a record $2.2 billion loss, and triggering writedowns.

Shareholders, not used to being told the truth and instead preferring sweet, little lies, promptly took the stock to the woodshed.

Analysts, whose job it is to predict these things, were shocked:”This is a clearly bad surprise as it comes in addition to the already ‘badly surprising’ warning issued by the group at the beginning of this year,” Natixis Securities SAS analyst Steven Gould said in a note to clients. “These announcements hurt the management’s credibility going forward.”

What was the catalyst for the early recognition of the massive writedown? Bloomberg explains:

The provisions are caused by new rules due to be approved by Parliament in Hungary today, forcing banks to refund “unfair” loan fees, and by the Romanian central bank’s push for faster bad-debt reduction amid the European Central Bank’s bank health check, Erste said. Writedowns on goodwill and deferred tax assets, triggered by the loan-loss provisions, may reach as much as 1 billion euros.

 

“By taking these measures, we have done everything in our power to avoid one-off effects from 2015 onward,” Chief Executive Officer Andreas Treichl said in the statement. “We are convinced that these measures will also help us pass the asset-quality review and stress test comfortably.”

 

Hungary contributed to Erste’s loss with a new law forcing it to repay some loan costs to customers. New rules due to be approved by Parliament in Budapest today will require banks to refund certain expenses on as much as 6.5 trillion forint ($28 billion) of loans going back as far as 10 years, according to the draft bill.

 

Higher bad-debt provisions in Romania, the Black Sea country of 20 million where Erste bought Banca Comerciala Romana SA for 3.75 billion euros in 2005, were caused by the central bank’s pressure on banks to clean up their balance sheets as part of the ECB’s bank health check, Erste said.

Ironically, it is the poor Eastern European sovereigns themselves who are forcing banks to do what is effectively is the job of their regulator, the ECB. Needless to say, the last thing the ECB will do is force banks to clean up their balance sheets: if anything Draghi knows full well that Erste is just the harbinger and Europe is loading to the brim with banks that are in the same situation. Should the ECB actually force banks to either revealt the true state of their bad debt and/or take measures to remedy it, the entire financial system would implode overnight.

Which is why instead we have an annual confidence building farce known as the “stress test”, which in the past has seen Bankia and Dexia pass with flying colors, and this year would have also given Erste an AAA+++ grade as well:

The loss won’t hit Erste’s regulatory capital to the full extent, and the bank’s common equity Tier 1 ratio will reach about 10 percent by the end of the year without raising fresh capital, Erste said. That’s because goodwill, brand value and other intangible assets of its Romanian unit that Erste is writing down aren’t part of the regulatory capital.

Which also goes to show just how ridiculous Europe’s definitions of capital truly are.

As for Erste, it’s ok – the stock has been punished and now it is time for the BTFD algos to lift it right back to where it was, because as has been made very clear in the past 6 years, fundamentals are no longer relevant or matter when making capital allocation decisions. The only thing that does matter is how much more of a moral hazard will the central banks push the system into before one day what happened to Erste today takes place at the global level, and the can containing the entire modern financial system which is broken beyond repair can no longer be kicked down the street.




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No Q3 GDP Boost: Hurricane Arthur Weakens To Category 1, Moves Away From East Coast

Anyone hoping for a resolution of the biggest economic conundrum of modern times will have to wait. What is the conundrum you ask? Simple: whether or not extreme adverse weather is positive or negative for GDP.

Recall that in the aftermath of Hurricane Sandy in October 2012, which caused some $70 billion worth of damages, the tenured econo-intelligentsia rushed to point out the silver lining, noting that courtesy of the idiotic broken window fallacy, at least US GDP would benefit. It is unclear if GDP did benefit, considering the latest Q4 2012 GDP print came barely at 0.1% suggesting ex-Hurricane GDP would have been negative. However what is clear is that the collapse in US GDP in Q1 2014 to -2.9% has not been blamed on Obamacare, or the collapse in global trade, or the ongoing decline in real wages, or the demise of the US middle class, or the fact that the US economy is still in a depression if one takes away the $10+ trillion injected by global central banks, and was instead blamed on “harsh weather.”

In other words, extreme weather conditions are positive to GDP if the lead to a lot of broken windows, but very negative if they result merely in people spending excessively on heating and warm winter clothing.

Hence conundrum.

So it was hoped that Hurricane Arthur, which made landfall overnight on the North Carolina coast, would provide some clarity, based on what happens to Q3 GDP because remember: after Q1 and Q2 GDP, originally expected to rise by over 2.5% have now tumbled, the great hope is that the “escape velocity” economic surge, originally penciled in for Q2 2013, then Q3, then Q4, then Q1 2014, then Q2 2014, would finally take place in the second half of 2014. Of course it won’t, because there is no economic recovery to speak of – there is simply propaganda to make the record Dow Jones appear modestly credible although lately even CNBC is largely laughing when trying to justify the 17,000+ print with the actual state of the economy – but at least a hurricane would be a great scapegoat to “explain” the latest delay to the “self-sustaining” recovery (recall that according to JPM, instead of “above-trend” 2.8% growth in 2014, the US economy is now expected to grow at the slowest pace since 2009). Or, alternatively, Arthur would have been just what the window breaking doctor ordered.

In any event, it appears that any expectation Arthur would devastate the east coast, with either positive or negative GDP consequences, has been cancelled. Because not only has Arthur just been lowered to a Category 1 hurricane from 2, but now appears to be moving away from the east coast entirely.

From CNN:

Arthur weakens to a Category 1 hurricane with maximum sustained winds of 90 mph.

 

North Carolina seems to have dodged a bullet. Hurricane Arthur did not dawdle over the coastline to vandalize neighborhoods for long. The storm accelerated its rapid trek north, the National Weather Service said, and was leaving land behind as the sun rose.

 

Once again, it’s churning over the Atlantic on a water-bound path parallel to New England’s coast.  A line of rain clouds is sweeping east overland to meet the hurricane as it climbs, dumping rain all the way up to Maine on Friday, downing trees and knocking out power long before Arthur is to arrive.

 

As Arthur leaves the South’s shores, hurricane watches and warnings are vanishing and resurrecting, as tropical storm warnings are posted farther north in anticipation of the storm’s gradual demise around Nova Scotia.

 

When Arthur came ashore with 100-mph winds at 11:15 p.m. Thursday, Robin Nelson’s house clattered and rumbled. She was right in the path of the eye wall.

 

The Category 2 storm made landfall between Cape Lookout and Beaufort, North Carolina, the National Hurricane Center said.

 

Nelson lives with her husband and two sons in Newport, right across the Newport River Sound from Beaufort.

And from NYT:

Hurricane Arthur began pushing away from the North Carolina coast on Friday morning after battering the shoreline with heavy rains and strong winds.

 

As the storm moved back into the Atlantic, the extent of any damage along the state’s coastline and areas just inland was unclear, and forecasters said the storm could threaten New England later on Friday.

 

At 7 a.m., the National Hurricane Center in Miami said that Arthur was powering its way offshore at 23 miles per hour. The hurricane had maximum sustained winds of 100 miles per hour, and its center was 65 miles east-northeast of Kitty Hawk. Although the storm was set to churn far from the American coastline for most of the day, forecasters said it could lash the Massachusetts coast with heavy rain on Friday night. A tropical storm warning was in place for Nantucket and Cape Cod, and forecasters extended it early Friday as far west as Woods Hole.

Still, there is some hope for a GDP “boost” however tiny: “Utility companies reported thousands of power failures. Tideland Electric Membership Corporation, which provides service in the Outer Banks, said more than 7,700 of its customers were without electricity early Friday. And Duke Energy reported that more than 11,000 of its customers in Carteret County, where Arthur made its landfall, lacked electricity.”

As for billionaire hedge funders hoping their weekend Hamptons retreat, where they impress 20 year old girls with the size of their mansions, will be sunny and bright, the following latest trajectory map from the NHC should provide the answer.




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JPM Cuts Its Original 2014 GDP Forecast In Half, Sees Slowest Full Year Growth Since 2009

It was precisely 6 months ago, on January 3, when JPM, blissfully unaware of the powerful snowstorms that were raging outside its office, a condition which would later be branded with the technical economic term “harsh weather“, predicted that the US economy would grow by 2.5% in the first half and 3.0% in the second, leading to a solid 2.8% annualized growth for 2014, a growth rate which would mean the US economy would grow at the fastest pace since 2005.

Fast forward exactly six months later, when on July 3, “harsh weather” firmly in the rear view mirror (but blissfully unaware of the record drought slamming California, the monsoons about to crush India, and El Nino set to ravage the US in the fall, not to mention two regional civil wars, a China whose housing bubble has popped and whose rehypothecation scandal means Chinese GDP is about to fall off a cliff, and global trade generally grinding to a halt), JPM has just followed with a revised GDP forecast. Its latest (and certainly not least) prophecy for the full year GDP: precisely one half of what it expected 6 months ago, or just 1.4%, following a cut to Q2 GDP to 2.5% from 3.0% (which means negative growth for the entire first half, something in a less insane world would be called a recession), while keeping Q3 and Q4 GDP miraculously at 3.0% for both quarters.

From JPM:

GDP growth and job growth go their separate ways: The contrast between weak GDP growth and strong job growth in 1H14 only intensified this week. Real GDP growth in 1Q14 was -2.9% saar, and we are reducing our forecast for 2Q14 to 2.5% (from 3.0%). Real GDP appears to have contracted in the first half. At the same time, payroll employment averaged 231,000 in 1H14, the strongest six-month run of job growth in the expansion to date. The obvious result is a sharp decline in productivity in 1H14 and a surge in 1H14 unit labor cost estimated at about 5% saar.

In other words, instead of above-trend, “escape velocity” GDP, the highest in nearly a decade, in 2014 US GDP is now poised to grow just 1.4% – the lowest annual growth rate since the Lehman crash.

What a difference a snow storm makes!

 




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US Markets Are Closed: Here Is What Else Is Going On

July 4th may be a US national holiday, which means the S&P 500 won’t hit a record high on good news and a recorder high on bad, but judging by global trading volumes – already abysmal heading into today – one may as well give the entire world a day off. However, for now, global equities have come off the impressive, and curiously schizophrenic US-data inspired gains of yesterday which sent the DJIA over 17,000 yet which has resulted in an almost unchanged 10Y Treasury print since before the NFP release. Once again bonds and stocks agree to disagree.

Asian markets are having a positive Friday helped by yesterday’s +0.55% gain in the S&P 500 and the first close above 17,000 in the Dow. However, as noted, it has been a beyond quiet session and more importantly, Treasuries continue to stabilise as if the NFP print never happened, and certainly disagree diametrically with the equities’ take on the payroll number. The Nikkei (+0.6%) is pacing regional equity bourses, spurred by the +0.4% performance of dollar-yen (once again a USD story more than a JPY weakening story).

In Europe, while the periphery may pretend it is growing due to what is now a quarterly change in the actual definition of GDP, the core continues to deteriorate, only now it is not just France but Germany as well, whose latest factory orders print was a doozy, sliding -1.7% from 3.4% last month, far below the -1.1% expected. Domestic orders fell 2.5%mom after +1.1%, while foreign orders were down 1.2% mom after +5.0%. Orders from within the Euro area rose strongly for a second consecutive month (+5.7%mom after +8.9%). Orders from outside the Euro area declined 5.2%mom after +2.9%. Just how bad is the Chinese economy if it is starting to impact German exports now too?

A combination of lower stocks and redemption/coupon flows provided a bid tone to German bunds, with the German 1-yr yield in negative territory for the first time since May 2013. Consequently Bunds are higher by 24 ticks on a break of the 61.8% at 146.72 (the contract high on Wed to post NFP low yesterday), and on Asian buying.

Despite the firmer USD, we’re not seeing broader weakness in EMFX. Indeed, some of the more vulnerable EM currencies such as IDR (+0.3%) and INR (+0.05%) are enjoying gains against the greenback, even with a number of Street forecasters bringing forward their Fed rate hike estimates late yesterday/overnight.

European shares little changed with the banks and utilities sectors underperforming and travel & leisure, media outperforming. The Italian and Spanish markets are the worst-performing larger bourses, the Swiss the best. The euro is weaker against the dollar. Irish 10yr bond yields fall; German yields decline.

Obviously, there is nothing on the US event docket.

Market Wrap

  • S&P 500 futures down 0.1% to 1976.1
  • Stoxx 600 down 0.1% to 348.7
  • US 10Yr yield down 0bps to 2.64%
  • German 10Yr yield down 2bps to 1.27%
  • MSCI Asia Pacific up 0.4% to 147.6
  • Gold spot up 0.2% to $1322.3/oz

EUROPE MARKETS

  • 9 out of 19 Stoxx 600 sectors rise; travel & leisure, media outperform, banks, utilities underperform
  • 50% of Stoxx 600 members gain, 47.3% decline
  • Eurostoxx 50 -0.2%, FTSE 100 -0.1%, CAC 40 -0.1%, DAX -0%, IBEX -0.2%, FTSEMIB -0.5%, SMI -0%

ASIAN MARKETS

  • Asian stocks rise  with the ASX outperforming and the Shanghai Composite underperforming.
  • MSCI Asia Pacific up 0.4% to 147.6
  • Nikkei 225 up 0.6%, Hang Seng up 0.1%, Kospi down 0.1%, Shanghai Composite down 0.2%, ASX up 0.6%, Sensex down 0.1%
  • 8 out of 10 sectors rise with consumer, materials outperforming and energy, utilities underperforming

EUROPE NEWS

A combination of lower stocks and redemption/coupon flows provided a bid tone to German bunds, with the German 1-yr yield in negative territory for the first time since May 2013. Consequently Bunds are higher by 24 ticks on a break of the 61.8% at 146.72 (the contract high on Wed to post NFP low yesterday), and on Asian buying.

EQUITIES

After US-inspired gains yesterday European equities have come off their highs (EuroStoxx 50 -0.24%), weighed on by the financial sector. The sector underperformance is the result of Erste saying it expects a record loss of EUR 1.4-1.6bln this year on write-downs in Hungary and Romania and BNP, the worst performer in the CAC, who were the focus of a negative broker move at Macquarie.

FX

In FX, EUR/USD has broken yesterday’s lows as banks continue to expect more from the ECB later in the year and cautious sentiment enters the market. EUR/GBP is at its lowest levels since mid-2012 and nearing an option barrier at 0.7900 and USD/CHF is testing its 200DMA to the upside at 0.8949.

COMMODITIES

WTI and Brent have traded sideways, with little change as light news flow and thin volumes offer little defined price action. Notably BoAML say that oil prices could rise by USD 40-50 if the 2.6 mn b/d of oil production in Southern Iraq is lost, although the risk is low, Brent prices averaging USD 106 in 2014 and USD 103 in 2015, though upside risk to these exist given the recent escalation of conflict and production losses in Northern Iraq. Elsewhere, spot gold traded range bound overnight after rebounding from yesterday’s US-data and stronger USD inspired losses, however broke out of its tight range in early European trade.

The overnight summary concludes with comment by DB’s Jim Reid

The US economic bulls certainly snatched the yellow jersey yesterday after payrolls gave them the perfect riposte to all the recent doubts over growth. However until we get past the weather related snapback it’s going to hard for them to conclusively win the argument. It was interesting that after an initial sell-off (6bps), US 10 yrs only rose 1.2bp on the day and settled at 2.638% at the early closing bell. The initial move may have been more related to the headline print (+288k vs 215k expected) and change in unemployment (6.1% vs 6.3% in May) but the move back down in yield might have been a result of some of the detail in the report. To be clear, it was a strong payrolls report, but some noted that wage inflation indicators remained benign with average hourly earnings at +2.0% YoY, roughly where it’s been bouncing around for the last 18 months and broadly in line with CPI. Others highlighted that the number of people working part time because they can’t find full time work rose; also many of the gains were in relatively low paying sectors and that the overall participation rate (62.8%) is stuck at 35 year lows.

More broadly, DB’s rates strategist Dominic Konstam raises two points which might explain yesterday’s rally in rates following the initial selloff. Firstly, Dominic thinks positioning leaves few investors ready or willing to short the market. Secondly, Dominic thinks the bigger picture issue is that the focus should and is turning away from the cyclical story of US recovery to the structural story. He thinks the Yellen-led Fed isn’t too far away from focusing more and more on the structural limits to growth, namely productivity which continues to be disappointing. The problem for wages — and why they are low is that people are paid their productivity. Dominic believes that the ongoing productivity funk is the reason why real rates can’t rise above say 1% and why neutral real funds might be close to 50 bps.

Away from payrolls, the other major focus yesterday was the ECB. The complexity of last month’s package left many scratching their heads and there was a lingering fear that the TLTRO would indeed be so “targeted” that it may constrain the ability of banks to use it to the full extent. However the new details that emerged yesterday seemed to be fairly accommodative and were supportive of the carry trade that Draghi verbally tries to talk down. According to DB’s European economists Gilles Moec & Mark Wall, the technical documentation makes it clear there won’t be any constraint that would hinder how banks would be able to recycle the proceeds of the TLTRO. The spread compression seen in periphery European bonds yesterday seems to support that view. Beyond the TLTRO technicalities, Draghi announced that the ECB would reduce the frequency of its meetings to one every 6 weeks from January 2015 onward (together with the reserve maintenance period). Draghi also announced that the ECB would publish “accounts” of the meetings from January 2015 onwards as well.

Asian markets are having a positive Friday helped by yesterday’s +0.55% gain in the S&P 500 and the first close above 17,000 in the Dow. It’s generally a quiet session though and interestingly Treasuries continue to stabilise. The Nikkei (+0.5%) is again pacing regional equity bourses, spurred by the +0.4% performance of dollar-yen (once again a USD story more than a JPY weakening story). Despite the firmer USD, we’re not seeing broader weakness in EMFX. Indeed, some of the more vulnerable EM currencies such as IDR (+0.3%) and INR (+0.05%) are enjoying gains against the greenback, even with a number of Street forecasters bringing forward their Fed rate hike estimates late yesterday/overnight. With less than a week until Indonesia’s elections, Bloomberg is reporting that Joko Widido is now trailing Subianto in some polls. This is something to watch for in the coming days in one of Asia’s higher beta EMs.

Following the events of yesterday and today’s US holidays, it’s much a quieter day ahead. German factory orders is the only data release of note. Sovereign credit rating updates are scheduled for the Netherlands and Hungary.




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Is The Cloward-Piven Strategy Being Used To Destroy America?

Submitted by Brandon Smith of Alt-Market blog,

In the mid-sixties at the height of the “social revolution” the line between democratic benevolence and outright communism became rather blurry. The Democratic Party, which controlled the presidency and both houses of Congress, was used as the springboard by social engineers to introduce a new era of welfare initiatives enacted in the name of “defending the poor”, also known as the “Great Society Programs”. These initiatives, however, were driven by far more subversive and extreme motivations, and have been expanded on by every presidency since, Republican and Democrat alike.

At Columbia University, sociologist professors Richard Cloward and Francis Fox Piven introduced a political strategy in 1966 in an article entitled 'The Weight Of The Poor: A Strategy To End Poverty'. This article outlined a plan that they believed would eventually lead to the total transmutation of America into a full-fledged centralized welfare state (in other words, a collectivist enclave). The spearpoint of the Cloward-Piven strategy involved nothing less than economic sabotage against the U.S.

Theoretically, according to the doctrine, a condition of overwhelming tension and strain could be engineered through the overloading of American welfare rolls, thereby smothering the entitlement program structure at the state and local level. The implosion of welfare benefits would facilitate a massive spike in poverty and desperation, creating a financial crisis that would lead to an even greater cycle of demand for a fully socialized system. This desperation would then “force” the federal government to concentrate all welfare programs under one roof, nationalize and enforce a socialist ideology, and ultimately, compact an immense level of power into the hands of a select few.

Cloward and Piven claimed that this could be accomplished at a grassroots level through community activism, and, that it would facilitate a more compassionate federal authority, however, there are numerous problems with these assertions.

The Cloward-Piven Strategy has nothing to do with grassroots activism, and accomplishes nothing tangible for the downtrodden poverty class. In fact, I would dare to say that Cloward and Piven as well as most social engineers are well aware that the concept ultimately only serves to give even more dominance to the establishment and pilfer even more freedom from the masses.

Cloward-Piven is not limited to the destabilization of state and local welfare programs. It can easily be used against federal level entitlements, and in reality, is much more effective against an entity with the proven tendency towards exponential debt spending. Though the federal government may be able to borrow fiat dollars through the Federal Reserve to prolong welfare rolls while the states cannot, a more volatile threat arises when debt monetization begins to wear down the purchasing power of the currency. Weakened purchasing power results in reduced consumer activity, less industrial growth, less GDP, and obviously, more poverty. The dollar has lost approximately 98% of its purchasing power since 1972, and after 50 years of the so-called “War on Poverty”, nearly one third of the American population now repeatedly slips under the official poverty line.

In the past decade alone, the number of people dependent on food stamps and EBT for their survival in the U.S. has doubled from 25 million people to nearly 50 million people. Those who receive some kind of payment from the government, including those on social security, disability, and veterans benefits, are approximately 100 million. Americans on social security do not consider themselves welfare recipients because they paid into the system, however, the point remains that if the federal money tap shuts down due to overwhelming participation, the checks will stop whether you paid into the system or not.

In the end, it is the Federal Government itself that is most vulnerable to the Cloward-Piven Strategy, and I believe the goal is to set fire to ALL social structures in the U.S., then assimilate them into a new globalist system.

The tactic of overwhelming the welfare structure REQUIRES the complicity of the government itself. A grassroots activist movement cannot and will never compel federal and state governments to expand welfare initiatives if they do not wish to. If welfare programs are not expanded beyond their capacity to be maintained, they cannot be overwhelmed. Therefore, government must cooperate with the Cloward-Piven Strategy by generating more and more welfare programs to be exploited. That is to say, the elitists who control our government, regardless of their claimed political party, must WANT to arrange circumstances to allow for Cloward-Piven to be successful.

Another key component of Cloward-Piven is the existence of an immense number of poverty stricken people. Without a significant portion of the population under the poverty level, there is no mass of people to use as a weapon. Again, grassroots activists would be hard pressed to actually create the kind of poverty levels they would need for exploitation. But wait! Government, along with the aid or direction of central bankers, is able to create any level of poverty it wishes at any time by simply pretending to bungle everything it does. Once again, Cloward-Piven (much like Saul Alinsky's repertoire of propaganda scams) is far more useful to the power elite than it is to the common citizen. As former White House Chief of Staff, Rahm Emanuel, famously said:

You never want a serious crisis to go to waste. And what I mean by that is it's an opportunity to do things you think you could not do before…”

In light of the Cloward-Piven Strategy, which is at its very core a method to artificially induce crisis, the otherwise insane policy actions of the Obama Administration and preceding puppet presidents now become perfectly logical. Obama, after all, has been a long time proponent of the methods of Saul Alinsky, the left wing gatekeeper equivalent to Neo-Con godfather Leo Strauss. Cloward and Piven were also both avid followers of Alinsky, who promoted lies, misdirection, subversion, and abandonment of conscience in order to win social power at any cost (special note – Alinsky also dedicated his book 'Rules For Radicals' to Lucifer…yeah, to the friggin' devil).

Under Obama's watch alone, our real national debt including unfunded liabilities and entitlements has risen to nearly $200 trillion. Our “official” national debt has gone from $10 trillion to $17 trillion in the short time Obama has been in office. Real unemployment including U-6 measurements stands at around 20% of all Americans. Personal wealth and savings have plummeted. Wages remain in stasis while prices on necessary goods continue to rise.

In my articles 'The Socialization Of America Is Economically Impossible' and 'Obamacare: Is It A Divide-And-Conquer Distraction?', I examined much evidence suggesting that Obamacare was actually designed to fail, and that the bumbling of the Obama White House when dealing with the program was purely deliberate. When coupled with Obama's handling of the current illegal immigration conflict, I would say that the Cloward-Piven Strategy is in full force.

Why fight tooth and nail against all common sense and history, why lie openly to millions of registered voters to get the program in place, only to allow it to derail because of a poorly designed website!? Because, Obama and his handlers know full well that it will end up costing the country billions that we cannot afford, and aid in a resulting crash.

Why the sudden surge of illegal immigrants into the U.S.? Why not! The White House has made it clear that it has every intention of keeping them within America by allowing the border patrol to ship the detained across the country where they are then released. Obama's threat to use executive action to force through his own version of the immigration bill is the icing on the cake. Amnesty is essentially guaranteed, I believe, in the near term, which is why tens of thousands of Central American parents are willing to send their children on a journey where they could very well be kidnapped by sex traffickers or killed. If the White House really wanted to stop this humanitarian crisis, the President would state publicly and clearly that America is not a drive through welfare center, that there will be no free goodies at the second window, and that there will be no chance of amnesty, instead of diverting more agents to the border to ensure more illegals are shipped into the interior.

The president does not wish to stop the flood of immigrants exactly because Cloward-Piven requires their presence. Not only would this officially add millions of people to welfare rolls, but I would venture to suggest that Obama will likely include automatic sign-up to universal healthcare as part of his amnesty measures.

If there wasn't enough strain on the social welfare structure before, there certainly will be now.

I would remind readers, though, that in the final analysis this is NOT about Obama. I have seen other commentators including Glenn Beck discuss Cloward-Piven in the past, but always through the blinders of the false left/right paradigm. Obama could not have attained the levels of destabilization he has without standing on the shoulders of those political errand boys who came before him. Ronald Reagan, for instance, was also responsible for signing the Immigration Reform And Control Act of 1986 into law, which was supposed to trade the amnesty of 3 million illegals for greater border security.  This new "more comprehensive" security was never implemented by Reagan.  Both Republican and Democratic regimes have made our current calamity possible, and the leaderships behind both parties are nothing more than paid mascots for international financiers and globalists who have a very different vision of what America should be.

If we allow ourselves to fall into the trap of making the developing crisis about a singularly unimportant man such as Obama, then the elites get exactly what they want – an angry and desperate citizenry out for the blood of a middleman and out for the blood of each other, while they sit back, relax, and wait to swoop in as our financial saviors with strings attached.

For those naïve enough to assume that Cloward-Piven is just a well intentioned activist method, it is important to understand that even if that were so, the effect of the Cloward-Piven Strategy will never achieve the goal its creators claimed to support. In my view, it is probable that they never really intended for it to produce wealth equality or an increased quality of life.

The tactic can only decrease wealth security by making all citizens equally destitute. As we have seen in numerous socialist and communist experiments over the past century, economic harmonization never creates wealth or prosperity, it only siphons wealth from one area and redistributes it to others, evaporating much of it as it is squeezed through the grinding gears of the establishment machine. Socialism, in its very essence, elevates government to the role of all-pervasive parent, and casts the citizenry down into the role of dependent sniveling infant. Even in its most righteous form, Cloward-Piven seeks to make infants of us all, whether we like it or not.




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What Happened The Last 4 Times Stocks Rallied For 23 Quarters?

Does this look sustainable to you? Of course, it’s different this time, right?

 

The S&P 500 is in the 23rd quarter of its recovery – and shows a 196% gain…. the last four moves of similar magnitude ended very badly.

 

H/t Geoffrey Batt




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The Arab Spring Just Got Serious Again – Kuwait Is Burning

Same stuff… different country. Once again someone (former opposition leader Musallam al-Barrak) exposed the corruption among the elites (revealed documents that allegedly prove billions of illicit financial transfers were made to senior officials, including judges) and the leaders (Kuwait officials) decided he should be arrested and charged with slander. This has caused uproar among the people as hundreds of protesters rallied overnight in support of al-Barrack, marching from his house to the jail chanting: “The people want to cleanse the judiciary!” The police in the oil-rich nation of Kuwait used tear gas and stun grenades early Thursday to disperse the protesters. 

 

As The Daily Star reports,

Kuwaiti police fired teargas and stun grenades to disperse an opposition rally demanding the release of prominent dissident Mussallam al-Barrak, activists said Thursday.

 

The public prosecutor Wednesday ordered Barrak, a former MP, to be held for 10 days after he was questioned for allegedly insulting the judiciary.

 

The court turned down Thursday a petition filed by Barrak’s lawyers to release him until his trial, defense lawyer Thamer al-Jadaei wrote on his Twitter account.

 

The court set a July 7 date to start hearing the case against Barrak, who is charged with insulting the supreme judicial council and slander against its chairman.

 

Soon after the court’s rejection, the opposition went into an emergency meeting to decide on further action.

 

Thousands of people gathered at Barrak’s residence southwest of Kuwait City Wednesday night and marched on the nearby jail where the former opposition leader was detained, the activists said.

 

Police intervened when hundreds of protesters reached the prison, firing teargas and stun grenades to disperse them. There were no reports of any casualties.

 

Smaller protests were also reportedly staged in other parts of the oil-rich Gulf state.

 

The opposition leader is accused of slandering and insulting the supreme judicial council and its chairman, Faisal al-Marshed, in remarks made at a public rally on June 10.

 

Opposition groups strongly criticized the legal action against him as unlawful and “politically motivated.”

 

At the rally, Barrak charged that former senior officials, including ruling family members, had stolen tens of billions of dollars from public funds and engaged in money laundering.

 

He also criticized the judiciary.

 

The scandal was later linked to claims that the same officials were seen in video footage plotting a coup.

 

Those allegations were made in a lawsuit filed last month by Sheikh Ahmad Fahad al-Sabah, a senior ruling family member and former energy minister.

 

Sabah is scheduled to be questioned Thursday by the public prosecutor as a witness.

 

Most opposition groups are not represented in parliament after having boycotted a July 2013 election in protest at Kuwait’s amended electoral law.

*  *  *

As we have noted previously, uprising against government corruption is a global trend and in the case of Kuwait (which is oil-rich, the last friendly place to US in the Middle East, and has the highest per capita Twitter usage on the planet), we suspect this ‘spring’ is far from over.

Things do not look good…

* * *

Of course now all we have to is wait for the US condemnation for this to really get going…




via Zero Hedge http://ift.tt/1s5Dra0 Tyler Durden

Independence Day? 79% Of Americans Are Fine With The Current Level Of Tyranny

Submitted by Michael Snyder of The American Dream blog,

On July 4th, the United States will celebrate Independence Day once again.  But who in the world are we trying to kid?  Our founders intended to create a society where freedom and liberty would be maximized, but that is not what America looks like today.  Instead, we live in a country that literally has millions of laws, rules and regulations.  We have a government that is obsessed with spying on the entire planet and that tries to watch, monitor, track and record as much information about all of us as it possibly can.  A “Big Brother” surveillance grid is being constructed all around us, and our militarized police are becoming more brutal with each passing day.  Sadly, most Americans don’t seem too alarmed by any of this.  In fact, a new Gallup survey has found that 79 percent of Americans are “satisfied” with the level of freedom in this nation.  That is a very alarming statistic.

If most people believe that everything is “just fine”, then our leaders are going to feel free to keep doing the same things that they have been doing.

That is why it is so frustrating that so many American “sheeple” appear to be so apathetic about the loss of our freedoms and our liberties.

But it was not all bad news in the Gallup survey.  Let’s take a look at the good news first…

The Good News

The good news is that Gallup has asked this question many times before, and over the years the percentage of Americans that are satisfied with the level of freedom in this country has been going down.  In fact, the latest figure of 79 percent is the lowest number that Gallup has ever recorded, and it puts us below 35 other countries

Seventy-nine percent of US residents are satisfied with their level of freedom, down from 91 percent in 2006, according to the Gallup survey, released Tuesday.

 

That 12-point drop pushes the United States from among the highest in the world in terms of perceived freedom to 36th place, outside the top quartile of the 120 countries sampled, trailing Paraguay, Rwanda, and the autonomous region of Nagorno-Karabakh.

So yes, Americans are way too apathetic about the loss of our freedoms and liberties, but at least the numbers are going in the right direction.

That shows that we are making progress.

And other recent surveys show this progress as well.

For example, according to a new report from the Pew Research Center, 74 percent of Americans do not believe that they have “to give up privacy in order to be safe from terrorism”.

That is a good sign.

And Americans are more dissatisfied with the federal government than ever before as well.

Gallup has found that a whopping 79 percent of Americans believe that there is widespread corruption throughout the government.

That is a new all-time high.

And Gallup has also discovered that confidence in Congress has fallen to a brand new all-time record low…

Americans’ confidence in Congress has sunk to a new low. Seven percent of Americans say they have “a great deal” or “quite a lot” of confidence in Congress as an American institution, down from the previous low of 10% in 2013. This confidence is starkly different from the 42% in 1973, the first year Gallup began asking the question.

In fact, Gallup found that confidence in all three branches of the federal government is declining.

So there are definitely signs that the American people are waking up.

But the numbers also show that there is still so much work to do.

The Bad News

The bad news is that most of the country still appears to be deeply asleep.  Our liberties and freedoms are eroding with each passing day, and most Americans simply do not care.

Most Americans don’t seem to care that the TSA is fondling thousands of women and children in airports all over the nation every single day.

Most Americans don’t seem to care that the NSA is recording billions of our phone calls and emails.

Most Americans don’t seem to care that our police are becoming increasingly militarized.  As I wrote about the other day, there were only about 3,000 SWAT raids in the United States back in 1980.  But today, there are more than 80,000 SWAT raids per year in this country.

Most Americans don’t seem to care that a baby was recently maimed for life when a police officer threw a grenade into his crib during a SWAT team raid.

Most Americans don’t seem to care that police recently tasered a man 18 times.  In fact, it barely made a blip on the national news.

Most Americans don’t seem to care that the Obama administration has discussed making gun owners wear RFID tracking bracelets.

Most Americans don’t seem to care that a new California law would allow police to confiscate guns based on accusation alone.

Most Americans don’t seem to care that our public schools have been transformed into “Big Brother” indoctrination centers.

Most Americans don’t seem to care that the U.S. border is considered to be a “Constitution-free zone” where officials can freely grab your computer and copy your hard drive.

Most Americans don’t seem to care that people are being sent to prison for collecting rain water on their own property.

Most Americans don’t seem to care that facial recognition technology is being installed all over the nation.

Most Americans don’t seem to care that the Obama administration has expressed a desire to establish a national DNA database.

Most Americans don’t seem to care that our cell phones are essentially high tech surveillance devices.

Most Americans don’t seem to care that if you type the wrong thing into a search engine that the police could come knocking on your door.

Most Americans don’t seem to care that local governments all over the country are now using automated license plate readers to scan our license plates.

Most Americans don’t seem to care that the federal government is grabbing hundreds of thousands of acres of private land all over the country.

Most Americans don’t seem to care that Bible-believing Christians are regularly identified as “religious extremists” in official government training materials.

Most Americans don’t seem to care that the federal government has identified dozens of different categories of Americans as “potential terrorists“.

Most Americans don’t seem to care that we have a president that is treating the Constitution like a piece of toilet paper.

I could go on for hours, but I think that you get the point.

We are becoming a little bit more like tyrannical regimes such as Nazi Germany and North Korea with each passing day.

We aren’t there yet, but that is the path that we are on.

And once our liberties and freedoms are gone, they will be exceedingly difficult to ever get back.

So please help us wake up more Americans while we still can.

Time is running out.




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

“It’s Either Do It, Or You Die” California Regulators Clamp Down On Water Waste

While Las Vegas faces an existential crisis (and appears to be ignoring it), California regulators are starting to clamp down on water waste. As WSJ reports, about 60 California cities and agencies have imposed mandatory water-use cutbacks, some as high as 50%. In many cases, the rules are enforced by charging higher fees for excess usage. In others, inspectors are deployed to crack down on scofflaws. Sacramento – the state’s capital – is among the worst offenders and most heavily ‘policed’ as a team of 40 inspectors have handed out2,444 notices year-to-date, with fines of up to $1,000 for repeat offenders. Neighbors are encouraged to whistleblow – there has been 7,604 water-use complaints; but not everyone is embracing the change as lawn repair is down 40% – “The propaganda dictates we haven’t much choice… It’s either do it or you die.”

 

 

As WSJ reports, the drought is starting to hit real people’s lives…

The pain of California’s three-year drought is spreading from its agricultural belt to urban lawns and backyards, where residents are being hit with fines for excess water use, and businesses such as golf courses and lawn care are seeing revenue dry up due to water restrictions.

 

About 60 California cities and agencies have imposed mandatory water-use cutbacks, some as high as 50%. In many cases, the rules are enforced by charging higher fees for excess usage. In others, inspectors are deployed to crack down on scofflaws.

 

Among the most aggressively monitored locales is the state capital, Sacramento, which issued 2,444 notices of violation in the first 5½ months of the year, with fines of up to $1,000 for repeat offenders.

 

This year, the city cut outdoor watering to two days a week from three. Because only about half its homes have water meters to measure use, Sacramento must rely on inspectors to help enforce the rules.

 

A team of 40 inspectors working for the city’s Department of Utilities investigate complaints. Sacramento, a city of 475,000, had received 7,604 water-use complaints as of June 18, said city spokeswoman Jessica Hess.

Sacramento said the goal is to change behavior, not raise revenue, but it’s not just California…

Residential water restrictions have been instituted in other drought-ravaged parts of the country, including Texas, Kansas and North Carolina. Irrigation-dependent industries there and in California have been hurt.

The people are not happy…

In Sacramento, Bob Odom said his family’s lawn-equipment repair business has dropped 40% this year from last year because of watering restrictions. “The propaganda dictates we haven’t much choice,” said Mr. Odom, 80. “It’s either do it or you die.”

 

 

Some residents are angry about the crackdown. “We spend hundreds of thousands for our homes and can’t even water the grass,” said Richard Massey, a 46-year-old disabled forklift operator, as he watched Mr. Geach cite a neighbor.

Finally, Gov. Jerry Brown has called for a 20% cut in overall water use since he declared a drought emergency in January. The State Water Resources Control Board is set to consider in July restrictions on such uses as operating outdoor fountains.

“Everyone is at risk over time from this drought,” said board chairwoman Felicia Marcus. “It really is all for one and one for all.”

And yet we go on as normal ignoring this ugly reality…


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