iftttwall

There was a lot of competition for Quote of the Day today. Between President Obama’s double-speak, a rationally exuberant Janet Yellen, and overnight idiocy from Suga and Abe, choices were numerous. But the following from Gary Gensler – still chair of the CFTC – took the provberial biscuit:

• *GENSLER: ‘I THINK MARKETS WORK BEST WHEN THEY’RE TRANSPARENT’ (but)
• *GENSLER SAYS HE ‘BENFITED FROM DARKNESS’ IN WALL STREET CAREER

Well that sums it all up.. The question is – will Massad have a CFTC-shaped floodlight fixed to the roof of the agencies’ building?

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QEdD54zSElY/story01.htm Tyler Durden

By Timothy Sandefur of Pacific Legal

Lawlessness: what this morning’s Obamacare announcement means

President Obama this morning announced that he would be issuing an administrative order—which requires no Congressional review—delaying the implementation of provisions of Obamacare that had led to the cancellation of a million or so insurance policies. This follows on the Administration’s similar delays of the Employer Mandate and the Individual Mandate. According to CNN, this morning’s delay is supposed to “cover millions of people who have had their insurance policies cancelled,” but the fact is that in many states, it won’t even do that—because insurance companies, anticipating the implementation of the new law, long ago decided to cancel these policies. Surprise!—except for the attentive observers who have been warning about this for years. Moreover, many states—including California—which are already going along with Obamacare are already beyond the Administration’s reach, because those insurance policies were cancelled by state agencies. This morning’s delay can’t do anything about that.

But there’s a much deeper problem at work here: the lawlessness of Obamacare, root and branch. The problems began with its initial enactment—first the Individual Mandate was supposed to be a “regulation of commerce.” That was unconstitutional, and the Supreme Court finally said no…only to rewrite the law by declaring it to be a “tax” instead. That doesn’t work either, though, because the Constitution requires that tax laws originate in the House of Representatives, and Obamacare began in the Senate. Meanwhile, the contents of the law—which members of Congress didn’t bother to read before they passed—gave away tremendous new powers to administrative agencies to write new rules to fill in crucial blank spots in the statute itself. For example, the Individual Mandate forces Americans to buy “minimum essential coverage”—but that term was left up to unelected bureaucrats in the Department of Health & Human Services to define later. And the law created a powerful new independent agency, the Independent Payment Advisory Board, and gave it power to write law about Medicare reimbursement rates without any checks and balances…and tried to make the law itself unrepealable.

Now come unilateral administrative delays on the order of the President. Keep in mind what these delays really are—they are not new laws, or amendments to the law…they are orders from the President to his subordinates to simply not enforce laws that are on the books. The Employer Mandate, for example, was “delayed” by an order that simply instructs Executive agencies not to enforce the reporting requirement. A company that fails to comply with that Mandate is still violating the law—it’s just that the President has chosen to look the other way for now.

The Constitution of the United States says that the President “shall take care that the laws be faithfully executed.” That provision was written because the Founding Fathers had experienced the arbitrariness of a government in which the British monarchy picked and chose which laws to enforce and which laws to ignore. The result of such political control over the law was, they knew, a breakdown in the rule of law—and a breakdown that allowed the powerful and politically well-connected to manipulate the system at will. As James Madison warned in the Federalist, “mutable” laws

poison[] the blessing of liberty itself. It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

Unfortunately, today’s administrative state gives so much power to unelected bureaucrats—who are protected against any meaningful control by voters—that they can alter, manipulate, and change the law almost at will. The result is a breakdown in the rule of law and an arbitrary system in which the government operates, not according to predictable standards and meaningful rules, but according to political whim and in arbitrary, day-to-day, ad hoc manner.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gab5Afd9xik/story01.htm Tyler Durden

The Forex market is the largest in the world and the least understood.  Since the late 90’s, traders and asset managers have flocked to it as an alternative to trade, compared to other common markets (Stocks, Bonds, Futures).  

But due to the fact that the market is decentralized, and unregulated, it also attracted a large amount of fraud, on many levels.  First, there was outright theft by groups such as the one led by Trevor Cook ($190 Million Ponzi scheme).  Then there were sham brokers, in the most extreme case, like One World Forex, that simply didn’t bother clearing client orders and used client funds to finance lavish lifestyles and a movie that was never released featuring Busta Rhymes.  Those in the new growing retail market on both sides of the dealing desk developed a special bond going through a unique experience that just wasn’t possible in other markets.  

It was said that this was a retail problem, that serious institutional Forex was not aparty to such nonsense.  But now the world’s largest investment banks are under investigation by the Department of Justice for Forex market rigging.  This includes names such as Goldman Sachs, Lloyds of London, JP Morgan Chase, Barclays, Citigroup, just to name a few (the full list of names has not been released).

 

– Forex nixon shock

fx concepts

forex fraud

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KkvF30XPPNM/story01.htm globalintelhub

Once again, the flood of momentum-chasing hot-money provided by the world’s central banks’ printfest is leading investors to push up European equities markets to the highest level since 2011 amid optimism that the region is recovering (top-down GDP dashed that hope this morning). Furthermore, since earnings are apparently the mother’s milk of stocks, investors are entirely ignoring the fact that earnings expectations for the European region are collapsing to their lowest since September 2009. As Bloomberg notes, “investors in Europe continue to buy hope for an upcoming earnings recovery,” but as Tristan Abet of Louis Capital warns, “there is a limit to that rationale… the risk is that the market loses patience.”

 

 

Chart: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/81_qaTtri_4/story01.htm Tyler Durden

In response to questions from members of the Senate Banking Committee at her confirmation hearing, Janet Yellen emphasized the need to maintain a highly accommodative stance of monetary policy in light of the disappointing economic recovery. Her comments were broadly in line with what Goldman would have expected, and by-and-large were very similar to statements made by Chairman Bernanke in the past; confirming moar of the same blindness to bubbles, lots of tools, and over-optimism.

(image h/t @PatoNet)

MAIN POINTS:

1. Yellen emphasized the high level of unemployment as a reason for continuing the highly accommodative stance of monetary policy, noting in particular the high level of long-term unemployment. She stated that “I consider it imperative that we do what we can to promote a strong recovery” and later said that “it is important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited” in light of the zero lower bound.

2. On asset purchases, Yellen stated that “I believe the benefits exceed the cost” and that purchases “have made a meaningful contribution to economic growth and improving the outlook.” More generally, she noted that “as the program gradually winds down, we have indicated that we expect to maintain a highly accommodative monetary policy for some time to come.”

3. There was very little to go on with respect to the outlook for near-term policy decisions, whether tapering asset purchases or adjusting the forward guidance. She did indicate that “at each meeting we are attempting to assess whether or not the outlook is meeting the criterion that we have set out to begin to reduce the pace of asset purchases.”

4. Asked about lowering interest paid on excess reserves, she cited concern about money market functioning, but noted that “it’s a possibility.”

5. Regarding financing stability, Yellen reiterated her view that asset price bubbles or financial imbalances can best be dealt with (at least initially) through regulatory policy rather than adjusting the overall stance of monetary policy.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YO9wYrN_e4g/story01.htm Tyler Durden

There is a reason why US consumer revolving (credit card) credit growth is getting lower and lower and lower and at last check posted a mere 0.2% annual increase.

That reason is that as the NY Fed disclosed moments ago, federal student loans officially crossed the $1 trillion level for the first time ever. Notably: the quarterly student loan balance has increased every quarter without fail for the past 10 years!

And just to prove that while credit card balances are plunging due to more stringent bank repayment requirements, this is more than offset by borrowers shifting to student loans, where the delinquency rate on student loans is soaring and has just hit an all time high of 11.83%, an increase of almost 1% compared to last quarter. Even according to just the government lax definition of delinquency, a whopping $120 billion in student loans will be discharged. Thank you Uncle Sam for your epically lax lending standards in a world in
which it is increasingly becoming probably that up to all of the loans will end up in deliquency.

Full report here

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/756LK3iTUy4/story01.htm Tyler Durden