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The 1,582-page (apparently bipartisan) omnibus spending bill announced last night adds up to a cool $1.1 trillion. As Bloomberg reports, lawmakers notes “not everyone will like everything in this bill,” and we can see why. There is no IMF funding, nothing that “blocks Obamacare,” the IRS gets a reprimand – barring them from targetng groups based on their ideological beliefs, preserves language that blocks Federal funding for abortions and spending any money to legalize marijuana. But, perhaps the most critical aspect of the bill is the NSA is required to give Congress number of phone records collected, reviewed during last 5 yrs, including estimate for records of U.S. citizens (among other things). Will that be one step too far for the administration?

Via Bloomberg:

Amendment to omnibus spending bill requires NSA to give Congress number of phone records collected, reviewed during last 5 yrs, including estimate for records of U.S. citizens.

NSA would have to provide unclassified report describing all spy programs that collect bulk data, including cost of programs, types of records being collected, kinds of data NSA plans to collect in future

NSA would have to file second unclassified report listing terrorist activities disrupted with aid of bulk phone records, detailing whether necessary information could have been obtained by other means

While this may be too much for the adminstration to bear, the Treasury is not happy that they can’t provide the standard reacharound to the IMF…

The Treasury Department has been seeking for months to boost the U.S.’s share, or quota, at the Washington-based IMF by shifting about $63 billion from an existing credit line. The U.S. is holding up the 2010 agreement by all of the IMF member countries, then totaling 187, to double the fund’s lending capacity to about $733 billion.

 

Holly Shulman, a Treasury spokeswoman, said in a statement that the department was disappointed that Congress had failed to include the quota funding, adding that “the IMF is critically important to U.S. economic and national security interests.”

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

Stocks may be masquerading as a big bounce today, driven by a VIX slam which has gotten the algos to ramp the S&P higher and of course a perfectly innocuous gold slam which as usual took out the entire bid stack, but the real money is furiously going elsewhere, such as today’s 4 Week auction. Two things were notable: first – the rate was a solid 0.000%. This is not that surprising: after all under ZIRP, and as long as the Fed has control and the USD is the reserve currency, ultra-short term maturities are cash equivalent, which is why investors don’t mind getting zero return in exchange for 1 month maturities.

However, what was far more notable is that the Bid to Cover in today’s auction just soared to 6.36x, highest than last week’s 5.66x, and the highest since December of 2011, when the scramble into short-term paper was a function of year end window dressing (made since unncessary courtesy of the Fed’s Reverse Repo facility).

So while algos are levitating stocks higher based on simple carry currency/VIX correlations, why the sudden real money scramble for the safety of near-term paper?

Finally, what is also notable is that all ultra-short durations are now trading at negative yields

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y6hL_oTUIdg/story01.htm Tyler Durden

It would appear that in order to appease the masses – despite his recent small bump in popularity post-Affair – France’s President Hollande has gone full Socialist-tard. Aside from promises to cut spending by EUR50 billion in the next 3 years (so less taxes?), Hollande has suggested…

• FRANCE’S HOLLANDE SAYS FRANCE MUST PRODUCE “MORE AND BETTER”
• HOLLANDE SAYS COMPANIES WILL IN RETURN BE GIVEN QUANTITATIVE TARGETS FOR HIRING, TRAINING
• HOLLANDE SAYS PUBLIC SPENDING CUTS CAN BE MADE WHILE PRESERVING FRENCH SOCIAL MODEL

Channeling Stalin, he further calls for “more economic governance of the Euro-zone” and the creation of a Franco-German energy company and more tax-harmonization with the Germans. We are sure Merkel will be over-the-moon at that suggestion.

So hitch up to Germany.. (and if they won’t then that’s a victory for nationalism also)

• *HOLLANDE CALLS FOR MORE ECONOMIC, SOCIAL COHESION WITH GERMANY
• *HOLLANDE SAYS GOVT TO CREATE 50,000 JOBS FOR YOUTH IN 2014

It’s just that easy…

So appease the peons with spending cuts..

• *HOLLANDE REITERATES THAT SPENDING MUST BE CUT TO REDUCE TAXES

then slam with Stalin-esque central-planning and control…

• *HOLLANDE CALLS FOR MORE ECONOMIC GOVERNANCE OF EURO ZONE

But in the interests of keeping his base happy… he clarified…

• *HOLLANDE SAYS HE HASN’T TURNED INTO A FREE MARKETEER

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1ZUS0FZkGU0/story01.htm Tyler Durden

Time reports:

The U.S. government allowed the Mexican Sinaloa drug cartel to carry out its business unimpeded between 2000 and 2012 in exchange for information on rival cartels, an investigation by El Universal claims.

 

***

 

Dr. Edgardo Buscaglia, a senior research scholar in law and economics at Columbia University, says that the tactic has been previously used in Colombia, Cambodia, Thailand and Afghanistan.

 

“Of course, this modus operandi involves a violation of public international law, besides adding more fuel to the violence, violations of due process and of human rights,” he told El Universal.

 

Myles Frechette, a former U.S. ambassador to Colombia, said while that the problem of drug trafficking in Colombia persists, the tactic of secret agreements had managed to reduce it.The period when the relationship between the DEA and Sinaloa was supposed to have been the closest, between 2006 and 2012, saw a major surge of violence in Mexico, and was the time when the Sinaloa cartel rose significantly in prominence.

Business Insider writes:

There have long been allegations that Guzman, considered to be “the world’s most powerful drug trafficker,” coordinates with American authorities.

 

But the El Universal investigation is the first to publish court documents that include corroborating testimony from a DEA agent and a Justice Department official.

Fox News reports:

According to the motion, the deal was part of a ‘divide and conquer’ strategy, where the U.S. helped finance and arm the Sinaloa cartel, through Operation Fast and Furious, in exchange for information that allowed the D.E.A. and FBI to destroy and dismantle rival Mexican cartels.

 

***

 

“Under that agreement, the Sinaloa Cartel, through Loya, was to provide information accumulated by Mayo, Chapo, and others, against rival Mexican Drug Trafficking Organizations to the United States government. In return, the United States government agreed to dismiss the prosecution of the pending case against Loya, not to interfere with his drug trafficking activities and those of the Sinaloa Cartel, to not actively prosecute him, Chapo, Mayo, and the leadership of the Sinaloa Cartel, and to not apprehend them.”

 

***

 

The motion claims Mayo, Chapo and Zambada- Niebla routinely passed information through Loya to the D.E.A. that allowed it to make drug busts. In return, the U.S. helped the leaders evade Mexican police.

 

It says: “In addition, the defense has evidence that from time to time, the leadership of the Sinaloa Cartel was informed by agents of the DEA through Loya that United States government agents and/or Mexican authorities were conducting investigations near the home territories of cartel leaders so that the cartel leaders could take appropriate actions to evade investigators– even though the United States government had indictments, extradition requests, and rewards for the apprehension of Mayo, Chapo, and other alleged leaders, as well as Mr. Zambada-Niebla.”

Salon notes:

Under the remit of the War on Drugs, millions of U.S. citizens have faced arrest and jail time for minor, nonviolent charges. All the while, it has been revealed, the U.S. government has been enabling billions of dollars worth of drugs to flood into the country from Mexico because of shady deals with the notorious Sinaloa cartel.

 

***

 

Sinaloa (believed to supply 80 percent of Chicago’s street drugs) has been working with U.S. authorities since 2000 to provide information in return for immunity and undisturbed drug trafficking. Court documents obtained by El Universal show testimony from DEA and DOJ officials affirming the relationship.

The U.S. government has – at least at some times in some parts of the world – long protected drug operations. (Big American banks also launder money for drug cartels. See this, this, this and this.  Indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis.)

And opium production is at an all-time high under the American occupation of Afghanistan.

Is American backing of the Sinaloa drug cartel another instance of U.S. government involvement in the drug trade?  Or a misconceived attempt to back one devil (the Sinaloa cartel has been responsible for massive violence in Mexico) against another?

This is analogous to America’s backing of the most dangerous and violent Muslim terrorists for decades … in order to contain rival Muslim factions.

Absolutely idiotic …

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/b1y_gb3Eo5w/story01.htm George Washington

Well that escalated quickly… As Europe closes, the precious metals complex is slaughtered on the altar of higher stocks and lower bond prices…

We can only imagin the fiduciary that would wait til the last mnute to bulk sell as much nominal paper gold and silver as this…

And for a sense of the volume…

Perhap best summed up thus:

I don’t always sell Gold, but when I do I do it at the market in 1 second

— Eddie Morra_ZH (@convert_trader) January 14, 2014

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/r9odw_ktwx4/story01.htm Tyler Durden