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

This should fix it and calm the panic:

• *OBAMA SAID TO APPOINT RON KLAIN AS EBOLA CZAR, CNN TWEETS

Forget medical experience, what the USA needs to conbat the worst Ebola pandemic ever is “an American lawyer and political operative” who is current Chief of Staff for Joe Biden.

 

Via Wikipedia,

Ronald A. “Ron” Klain is an American lawyer and political operative best known for serving as Chief of Staff to two Vice Presidents – Al Gore (1995–1999) and Joseph Biden (2009–2011). He is an influential Democratic Party insider. Earlier in his career, he was a law clerk for Supreme Court Justice Byron White during the Court’s 1987 and 1988 Terms and worked on Capitol Hill, where he was Chief Counsel to the Senate Judiciary Committee during the Clarence Thomas Supreme Court nomination. He was portrayed by Kevin Spacey in the HBO film Recount depicting the tumult of the 2000 presidential election.

Early life
Klain was born on August 8, 1961 in Indianapolis and grew up in a Jewish home. He graduated from North Central High School[4] in 1979 and was on the school’s Brain Game team, which finished as season runner-up.[citation needed] He graduated summa cum laude from Georgetown University in 1983. In 1987, he graduated magna cum laude from Harvard Law School,[4] where he won the Sears Prize for the highest grade point average in 1984-85 and was an editor of the Harvard Law Review.

Career

Capitol Hill career
Klain’s early experience on Capitol Hill included serving as Legislative Director for U.S. Representative Ed Markey. From 1989 to 1992, he served as Chief Counsel to the U.S. Senate Committee on the Judiciary, overseeing the legal staff’s work on matters of constitutional law, criminal law, antitrust law, and Supreme Court nominations. In 1995, Senator Tom Daschle appointed him the Staff Director of the Senate Democratic Leadership Committee.

Clinton administration
Klain joined the Clinton-Gore campaign in 1992. He ultimately was involved in both of Bill Clinton’s campaigns, oversaw Clinton’s judicial nominations, and was General Counsel to Al Gore’s recount committee in the 2000 election aftermath. Some published reports have given him credit for Clinton’s “100,000 cops” proposal during the 1992 campaign; at a minimum, he worked closely with Clinton aide Bruce Reed in formulating it. In the White House, he was Associate Counsel to the President, directing judicial selection efforts, and led the team that won confirmation of Supreme Court Associate Justice Ruth Bader Ginsburg. Klain left the judicial selection role in 1994 to become Chief of Staff and Counselor to Attorney General Janet Reno. In 1995, he became Assistant to the President, and Chief of Staff and Counselor to Al Gore.

Gore campaign
During Klain’s tenure as Gore’s Chief of Staff, Gore consolidated his position as the likely Democratic nominee in 2000. Still, Klain was seen as too loyal to Clinton by some longtime Gore advisors. Feuding broke out between Clinton and Gore loyalists in the White House in 1999, and Klain was ousted by Gore campaign chairman Tony Coelho in August of that year. In October 1999, he joined the Washington, D.C. office of the law firm of O’Melveny & Myers. A year later, Klain returned to the Gore campaign, once Coelho was replaced by William M. Daley. Daley hired Klain for a senior position in the Gore campaign and then named him General Counsel of Gore’s Recount Committee.

Legal career
In 1994, Time named Klain one of the “50 most promising leaders in America” under the age of 40. In 1999, Washingtonian magazine named him the top lawyer in Washington under the age of 40, and the American Bar Association’s Barrister magazine named him one of the top 20 young lawyers nationwide. The National Law Journal named him one of its Lawyers of the Year for 2000.

Lobbying
Klain helped Fannie Mae overcome “regulatory issues”.

2004-2008
During the 2004 Presidential campaign, Klain worked as an adviser to Wesley Clark in the early primaries. Later, during the General Election, Klain was heavily involved behind the scenes in John Kerry’s campaign and is widely credited for his role in preparing Senator Kerry for a strong performance in the debates against President George W. Bush, which gave Kerry a significant boost in the polls.[6] He then acted as an informal adviser to Evan Bayh, who is from Klain’s home state of Indiana. Klain has also commented on matters of law and policy on televised programs such as the Today Show, Good Morning America, Nightline, Capital Report, NewsHour with Jim Lehrer, and Crossfire.

In 2005, Klain left his partnership at O’Melveny & Myers to serve as Executive Vice President and General Counsel of a new investment firm, Revolution LLC, launched by AOL co-founder Steve Case.

Obama administration
On November 12, 2008, Roll Call announced that Klain had been chosen to serve as Chief of Staff to Vice President Joe Biden, the same role he served for Gore. Klain had worked with Biden previously, having served as counsel to the United States Senate Committee on the Judiciary while Biden chaired that committee and assisted Biden’s speechwriting team during the 1988 presidential campaign.

Klain was mentioned as a possible replacement for White House Chief of Staff Rahm Emanuel, but opted to leave the White House for a position in the private sector in January 2011.

Klain apparently signed off on President Obama’s support of a $535 million loan guarantee for now-defunct solar-panel company Solyndra. Despite concerns about whether the company was viable, Klain approved an Obama visit, stating, “The reality is that if POTUS visited 10 such places over the next 10 months, probably a few will be belly-up by election day 2012.”

via Zero Hedge http://ift.tt/1riS6Mc Tyler Durden

From Deutsche Bank’s Jim Reid

The recovery from the lows after Bullard spoke yesterday is another reminder how addicted markets still are to liquidity. Indeed in today’s pdf we reprint and  update a table from our 2014 Outlook showing the various phases of the Fed’s balance sheet expansion and pausing over the last 5-6 years and its impact on equities and credit. We have found that the relationship broadly works best with markets pricing in the Fed balance sheet move just under 3 months in advance. We’ve also included our oft-used chart of the Fed balance sheet vs the S&P 500 to help demonstrate this. So end July / early August 2014 was always the time that this relationship suggested markets should enter a new more difficult phase.

With this lag, the table rather neatly shows the pulsing reaction of credit and equities to the growth and pauses in the growth of the Fed balance sheet around the Lehman demise, QE1, QE2 and QE3. After the initial emergency expansion of the Fed balance sheet in 08 where risk assets still declined (they would have declined much much more without it) we have alternated between aggressive balance sheet growth and large to huge risk-on on one hand, and small balance sheet run-off and risk-off on the other. This period post the end of July is just the latest evidence that this pattern is real. So we still think central bankers hold the key to markets going forward and there seems to be a hint of change in the Fed.

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

Following last month’s exuberant catch-up to the Conference Board confidence, UMich confidence surged to cycle highs (helped by Ebola panic and the worst stock maket turmoil in years). At 86.4, handily beating the 84.0 expectations – this is the highest confidence since July 2007. This is the biggest beat of expectations since April 2013 as current conditions were flat but the outlook for the future (hope) surged to 78.4 – highest in 2 years.

 

 

 

 

Charts: Bloomberg

via Zero Hedge http://ift.tt/1oeg8gZ Tyler Durden

It appears Bunga-Bunga boy still has something to offer the international elite. After a lengthy meeting with Germany’s Angela Merkel (at a hotel in Milan) where Putin warned of “big transit risks” in delivery of Europe’s gas as Ukraine is “starting to siphon off our gas from the export pipeline,” and threatening to respond by “reducing flows by the amount stolen;” Putin decided the place to be was 78-year-old Berlusconi’s house at 3am. Finally, it is worth noting that Ukraine’s President Poroshenko was scheduled to meet with Frau Merkel this morning – we assume to plead his case for why gas transit should flow through his nation (and beg for some more support).

 

 

As Bloomberg reports,

Russian President Vladimir Putin flew into Milan last night for peace talks with European Union leaders after threatening to cut the supply of natural gas through Ukraine if the government in Kiev diverts fuel for domestic use.

 

…

 

“There are big transit risks,” Putin, who denies involvement in the Ukrainian conflict, said yesterday in Belgrade, Serbia. If Russia sees its Ukrainian partners “are starting to siphon off our gas from the export pipeline network, we will respond by reducing flows by the amount stolen.”

And then, as WSJ reports,

Russian President Vladimir Putin perhaps couldn’t resist an invite from his Italian chum, former Premier Silvio Berlusconi, in the early hours of Friday to his mansion in Milan.

 

…

 

A Russian presidential spokesman said Mr. Putin visited “his old friend” Mr. Berlusconi following an invite from the Italian politician. Mr. Berlusconi heads Italy’s biggest opposition party.

 

President Putin, 62, must have felt the need to relax after his meeting with Ms. Merkel at 1.36 a.m. CET on Friday. He drove off with a large police escort, which included dark limousines, to Mr. Berlusconi’s house and stayed there until roughly 3 a.m.

*  *  *

Strange Liaisons indeed…

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

The ECB may not release its minutes to the public (opting instead to keep these secret for 30 years) at least for now, but earlier today a transcript of its internal deliberations was made public by the NYT, which revealed how the ECB governing council once again snubbed its responsibilities, and in January 2013 bailed out a failing Cyprus bank, Cyprus Popular Bank, just months ahead of the now infamous Cypriot “bail-in” i.e., deposit confiscation. The story in a nutshell: following much internal wrangling and posturing by the “northern” states, notably the usual suspects such as Wiedmann and Knot, the Cypriot bank, which the ECB continued to bail out even though it should not have as the bank had obtained an ECB lifeline based on fake financials and glaringly impossible assumptions, the bank ultimately failed. Who was left holding the bag? Why Cyprus’ depositors of course.

The NYT explains how Popular Bank was “stung by a disastrous bet on Greek government bonds” and had been “in trouble for the better part of 2012 and depositors were withdrawing their savings in ever larger numbers” – this is largely known. What is not know is how the ECB once again trampled its mandate, which clearly is just for show, when it came to keeping the bank solvent for just a few more months so as to avoid yet another European market crash:

[Cyprus Popular Bank] needed cash and fast.

 

Under E.C.B. rules, troubled banks that can no longer raise funds on the open markets are allowed to borrow from their national central bank, which assumes responsibility for this so-called emergency liquidity assistance, or E.L.A.  Still, strict rules govern this process. The bank in question must be solvent. And if the loans surpass 2 billion euros, or $2.56 billion, the E.C.B. reserves the right to refuse additional requests for money. The methodology for valuing the collateral used to secure the credit also has to be disclosed.

 

Fearing possible contagion if the bank failed, the E.C.B.’s governing council, a decision-making arm consisting of 24 members, had approved an emergency loan request by one its members, the Central Bank of Cyprus, in late 2011.

In early 2013 things were coming to a head, and the collapse of Cyprus seemed inevitable. By then “loans to Cyprus Popular Bank had grown to €9 billion, about two thirds the size of the Cypriot economy, and Jens Weidmann, the hawkish head of the German Bundesbank, had begun to forcefully argue that this exposure was too large, according to the minutes of governing council meetings.”

By approving the loans — which were disbursed by the central bank of Cyprus — Mr. Weidmann said that the E.C.B. was violating a core tenet. That rule holds that banks on the verge of failure should not be bailed out with additional loans.

It was here that the now traditional posturing and data fabrications started: In December 2012 Weidmann said that “It was not the governing council’s job to keep afloat banks that were awaiting recapitalization and were not currently solvent.” A month later he followed up:

In January 2013, just two months before the controversial Cyprus rescue package, Mr. Weidmann repeated his complaint that the E.C.B. was putting itself at risk in propping up Cyprus Popular Bank — which subsequently changed its name to Laiki Bank.

 

Moreover, Mr. Weidmann said that the value of the collateral posted at the central bank was inflated — which, if true, would allow it to secure more credit.

 

This was a powerful charge as it questioned whether the Cyprus central bank, under its new governor, Panicos Demetriades, was trying to play down the bank’s problems in order to keep it alive.

 

To buttress his claim, Mr. Weidmann told his colleagues that the E.C.B.’s own risk analysts had concluded that the assets that Cyprus Popular had posted at its central bank were overstated by about €1.3 billion.

Others jumped on the bandwagon:

Christian Noyer, the head of the French central bank, said that he was “very much concerned” by the aggressive way that the Cyprus central bank was valuing the collateral, adding that it “doubled the risk” for the E.C.B.

 

Klaas Knot of the Dutch central bank also chimed in, saying the collateral issue made him feel “very uncomfortable.”

 

“If E.L.A. was provided without adequate collateral, this would be a grave issue,” Mr. Weidmann concluded, according to the minutes, as he pushed for the loans to be withdrawn.

He pushed, and pushed and… nothing, as usual.

Under a section in the minutes called “solvency information,” the governing council noted that it had received a draft report from the asset management company Pimco that said that bank needed about €10 billion in fresh cash — or about 10 times its capital at the time.

 

There would seem to be little doubt that the bank was finished, but the consensus was to keep the bank alive until an agreement could be reached on a broad rescue program with the Cyprus government.

 

The governing council decided “not to object”– in E.C.B. parlance — to the continuance of the lifeline.

Draghi, and the firm he worked for prior to joining the ECB, had won again. Not once did ut occur to the ECB to warn the population of Cyprus – because it wasn’t just Russian billionaires who lost their deposits in Cyrpiot banks – that one of its largest banks was about to fail and wipe out years of savings.

So why is this a story?

The concern has been that the airing of these discussions would reveal national strains and weaken the E.C.B.’s federal mandate. The governing council consists of the heads of the 18 central banks that make up the currency union and a six-member executive board over which Mario Draghi presides.

Apparently the ECB cared enough to release the following statement shortly after the NYT story hit:

The ECB neither provides nor approves emergency liquidity assistance. It is the national central bank, in this case the Central Bank of Cyprus, that provides ELA to an institution that it judges to be solvent at its own risks and under its own terms and conditions. The ECB can object on monetary policy grounds; in order to do so at least two thirds of the Governing Council must see the provision of emergency liquidity as interfering with the tasks and objectives of euro area monetary policy.

 

In this specific case there was full consensus in the Governing Council on the need to get assurances from the Central Bank of Cyprus that this bank was solvent. This was confirmed explicitly by the Central Bank of Cyprus, which also confirmed the proper valuation of collateral after an intense dialogue between it and the ECB.

 

The ECB was not the supervisor and fully relied on the assessment of the Central Bank of Cyprus. Therefore to draw conclusions about the ECB’s future banking supervision role on the basis of ELA to Cyprus is tendentious.

And with that, the ECB will continue pretending that all is well, it will continue to bail out borderline insolvent banks until it no longer can, at which point European depositors will continue to, first rarely and then all at once, fund Europe’s creeping bank insolvency wave because for all its talk, the ECB has done nothing to address the real elephant in the room: several trillion in bad loans spread across Europe’s banking system, the direct result of Europe’s historic depression, and which can only be “fixed” one bank at a time when its deposits are “realligned” in line with its viable assets, or to use the parlance of Jon Corzine “vaporized.”

via Zero Hedge http://ift.tt/1vn5OnB Tyler Durden

We suspect the market will be disappointed by this morning's headlines from China. Chinese rate markets are implying a RRR cut is coming soon (as swap rates drop below deposit rates – previously signaled 2 RRR cuts) but the PBOC announced this morning a muich more focused injection of cash to 20 of the nations' largest banks. RRR cuts, are (theoretically) considerably more broadly stimulative to lending than a $32.8 billion cash injection to banks – which are struggling to lend as demand for loans (given high costs of debt for the firms that need the money the most) is weak. One can only imagine the holes in bank balance sheets that exist if the PBOC is forced to do this. Simply put, no matter how much hope there is, as we noted previously, the PBOC will not be providing broad stimulus.

 

Markets are hoping/pricing-in a rate cut… (the last 2 times that swap rate have dropped below dep rates, PBOC cut RRR)

 

But the PBOC gives the banks cash directly (as The Wall Street Journal reports),

China’s central bank is planning to inject up to 200 billion yuan ($32.8 billion) into about 20 large national and regional banks, according to banking executives briefed on the matter, in another step aimed at spurring the world’s second-largest economy.

*  *  *

It seems the holes in bank funding are considerably bigger than the market thinks as we previously discussed, China will not be embarking on broad stimulus…

The punchline:  

 

 

Part of China’s “new normal,” he said, is that “big stimulus” won’t be called for every time growth decelerates. “And secondly, the new norm will involve a lot of rebalancing in terms of changing the economic structure.”

If that is indeed the case, one can now forget about any Chinese monetary intervention. Or rather, one can forget about such intervention until such time as the Chinese housing market is in freefall, at which point China's 1+ billion society will be on (if not beyond) the edge of out right revolt. To say that the PBOC will not get involved at that point is certainly naive. However, there will be blood on the streets, metaphorically when it comes to the New York stock exchange in Mahwah, NJ and literally when it comes to China.

via Zero Hedge http://ift.tt/103RXqC Tyler Durden