Malaysian Airlines Flight 370: The Complete Timeline And Infographic

With Malaysian authorities frustrated (and seemingly confused),  and US and Chinese government offering "help" to solve this increasingly mysterious disappearance of the Boeing 777-200ER over a week ago, we thought a quick summation of all that we know would be useful. The possibilities remain numerous but it appears the latest line of investigation is the pane vanished through "deliberate action" with the airline pilots coming under increasing scrutiny.

 

 

SATURDAY

7.24am: Malaysia Airlines confirms a jet lost contact with Subang air traffic control at 2.40am after it took off from Kuala Lumpur

10.30am: Families waiting at Beijing airport are told passengers will not arrive

By night: International rescue effort is under way. Two passengers used passports – one Austrian, one Italian – reported stolen in Thailand. Airline does not rule out terrorism

 

SUNDAY

2am: Airline says it last heard from MH370 at 1.30am, not 2.40am

2.43am: Airline chief executive makes first public statement

Noon: Hong Kong Immigration Department confirms 45-year-old local woman was on board

 

MONDAY

The largest rescue flotilla in Chinese naval history – four warships and five civilian and commercial vessels – speeds overnight to waters between Malaysia and Vietnam. Ten Chinese satellites join the hunt

Night: Airline announces it will give 31,000 yuan (HK$39,200) to relatives of each passenger as a special condolence payment

 

TUESDAY

Two senior Malaysian military officials say missing jet flew for an hour off its flight course and at a lower altitude after disappearing from civil aviation radar, partly explaining why Malaysia expanded search area to include Strait of Malacca two days earlier.

3pm: Malaysian police say one of two passengers using a stolen passport is an Iranian teenager, and release photos of both

 

WEDNESDAY

Beijing slams Malaysia's "pretty chaotic" and conflicting information as Kuala Lumpur officials fail to pinpoint the plane's last known whereabouts.

Malaysian media report the government has invited a witch doctor to help look for the plane by using a magic carpet, two coconuts and a wooden stick.

 

THURSDAY

Malaysian military confirms spotting an unidentified aircraft on its radar about 1 hour and 20 minutes after MH370's signal went cold. Airline says it has not been determined if that was the missing jet.

Malaysian authorities vow to banish witch doctor if he again carries out a ritual at the country's main airport after the scene draws ridicule around the world.

 

FRIDAY

Investigators are increasingly certain the jet turned back across the Malay Peninsula after losing communication.

International search expands westwards towards Indian Ocean.

 

YESTERDAY

Search narrows to two air corridors as Malaysian Prime Minister Najib Razak confirms plane kept flying after it "vanished". Officials also confirm the jet's disappearance was a "deliberate act".

 

 

And more on the "deliberate action" from WSJ,

Malaysian police are examining the home flight simulator of the pilot of Malaysia Airlines  Flight 370 in a closer focus on the plane's crew amid suspicion that the aircraft disappeared because of foul play.

 

The homes and of Capt. Zaharie Ahmad Shah and co-pilot Fariq Abdul Hamid were searched by police Saturday and investigators spoke to the pilot's family, the Malaysian Transport Ministry said in a statement.

 

The searches came as Prime Minister Najib Razak had said that he believes that the plane vanished through "deliberate action'' on March 8, when it disappeared with 239 people on board on a flight between Kuala Lumpur and Beijing.

 

 

The disappearance of Flight 370 has baffled investigators for more than a week, but Mr. Najib's comments have appeared to corroborate the analysis of U.S. investigators, which determined that one or more people on the plane deliberately changed its course and tried to mask its location.

 

Malaysia's leader says communications systems on Flight 370 were cut off by "deliberate action." U.S. officials are investigating whether a third system, on the plane's lower deck, was also compromised. WSJ's Jason Bellini explains.

 

Colleagues have described Capt. Zaharie as an aviation enthusiast who loved to fly and built a flight simulator at home.

 

 

The Transport Ministry statement said that Malaysia was treating both search corridors with "equal importance'' and is asking countries to provide further assistance in the search for the Boeing BA +1.00%  777-200, including satellite data and analysis, ground-search capabilities, radar data and maritime air assets, and how best to deploy them.

 

Malaysian officials have contacted countries along the corridors including Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, Pakistan, Bangladesh, India, China, Myanmar, Laos, Vietnam, Thailand, Indonesia, Australia and France, the statement said.

 


    



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Putin Reiterates To Merkel That Crimean Referendum Is Legal

More of the same. Via the Kremlin:

  • PUTIN, MERKEL DISCUSSED UKRAINE CRISIS BY PHONE, KREMLIN SAYS
  • PUTIN TELLS MERKEL RUSSIA WILL RESPECT CHOICE MADE BY CRIMEANS
  • PUTIN SAYS CONCERNED ABOUT TENSIONS IN SOUTH, EAST UKRAINE
  • PUTIN TELLS MERKEL CRIMEA REFERENDUM ON JOINING RUSSIA IS LEGAL

Even as the West (and NATO) continues to reject any legitimacy of the referendum.

So what happens when the people vote to join Russia, Russia formally annexes the territory and calls the western diplomatic bluff? The answer may be provided as early as 8pm local Ukrainian time when the polls are set to close, and it will likely involve further provocations such as this one, reported moments ago by Sky News: “Interfax reports three Ukrainian military trains carrying equipment into eastern Ukraine have been intercepted by Russian forces.”


    



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Stock Market: Be Careful Now

stock market bear

2014 is no party for stock market investors. January was a smack in the face, especially newcomers, as the markets decided to go for a 5 percent nosedive. But they again recovered in February and some indices put up new all-time highs; others are on the fence and you can feel that doubt is creeping in as investors are starting to feel uncomfortable having a large part of their portfolio invested. As a result, March also turns out to be a challenging month for stocks. And this should not come as a surprise, as different signals indicate that the market situation is getting overheated.

We cannot blame anyone here. The current bull market has recently had its fifth birthday and is almost breaking the top 3 of the longest stock market rallies in history. With an increase of 147% for the Dow Jones index from its March 2009 low, it is obvious that the magnitude and momentum of this bull market is just as qualified for the history books as its duration. That is clearly visible on the next chart (source: Barclays).

Bull markets - duration vs magnitude

You can also see that we have seen better and longer bull markets in the past. In the ‘50s, we had a seven year bull market and the bull market of the ‘90s lasted for almost ten years! Just to be clear: a bull market remains theoretically intact as long as an index does not drop by more than 20 percent from a high. There is plenty of upside in other words, but the air does get thinner the higher we go. Naturally, the upward potential has decreased and as history has taught us, at one point the cable on this elevator will snap and we will go down a lot faster than we came up.

The question, of course, is when will the music stop? That has always been a tough call to make. With regards to valuation, we are already in overtime at the moment. The markets are generously valued at this point, more specifically when looking at market capitalization versus GDP (Warren Buffett’s favorite indicator). Another comparable ratio, however, is also showing warning signs. The Tobin Q ratio measures the total market cap of non-financial listed companies in relation to the replacement value of the assets of these companies. The ratio is a good check to see if the fair value of these companies is deviating from their stock price. Above 1x, this ratio indicates that investors are prepared to pay a lot more for expected performance and goodwill.

Tobin Q

The above chart from Ed Yardini clearly shows that the actual position of the Tobin Q ratio, as well as the adjusted version, has been living north of the 1x level since the fourth quarter of 2013. In the past, namely in the seventies, the current position would have been enough to cause turmoil. Naturally, there are exceptions as evidenced by spike around the dot com boom, but still…

Still, it feels like the 2000-period on the stock market. Just have a look at the chart below, which compares the S&P 500 to the Rydex Asset Ratio (Bears versus Bulls). It’s been 13 years since the ratio dropped this low. Investors are pouring massive amounts of cash into equity funds (long only) and liquidating their short / hedge funds and money market funds. This again is huge warning sign for the markets.

Rydex Asset Ratio 2014

And that is precisely the problem investors have today. On the one hand, valuation and duration are above average, but that does not necessarily mean that we are at the dawn of a big stock market correction. This stock market rally could last for a few more years and valuations have a lot more room to grow before we can even start talking about a bubble. On the other hand, it is clear that the rally is having a tough time repeating its 2013 performance, at least for now.

That is why vigilance is in order. Indeed, investing is making an estimation regarding the future, taking healthy probabilities into account. As the market rally persists, its effective life span decreases; that is pure logic. Unfortunately, logic is not always what governs the stock market. Nevertheless we have become more careful in 2014 and have advised our subscribers to take profits of the table here and there, without getting out of the market completely. We rather wait and see for now as things could go either way from this point.

Protect your capital: read our GUIDE TO GOLD!

 

Sprout Money offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies from Sprout Money are transformed into the Gold & Silver Report and the Technology Report.

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The Sovereignty Series – Reassessing Our Lives – The Value of Being Centered

Reassessing Our Lives – The Value of Being Centered

The Sovereignty Series

By

Cognitive Dissonance

 

 

To subscribe to 'Dispatches', a periodic newsletter from Cognitive Dissonance and TwoIceFloes Creations, please click here. 

 

Most of us will argue that on those occasions when we reach critical decision points in our life we believe they are successfully navigated. Just as important we believe the vast majority of our decisions are based upon current data, the present state of our personal affairs and how it all fits in with our perceived life goals.

Quite frankly, for many of us this is an illusion we embrace in order not to upset our sense of self and our positioning within the ‘real’ world we call ours. In reality we rarely deviate much from our present path, a path more often chosen for us by opportunity and circumstance then by directed thought and conscious decision.

When do we ever pull back and thoroughly assess where we are and what we want, not based upon debt or family pressures or even what our employment situation demands of us, but upon what we really truly desire of ourselves? Until recently, for this author at least, the honest answer was not very often.

In fact the last time I conducted this type of thorough self assessment was back in 1990 when I completely changed my career and life direction. While the decision was right for me at the time, it was now well past stale and moldy, the ‘sell by’ date long past expiration.

Since that critical juncture in my life I had not considered conducting another self assessment of this sort with any real seriousness. If anything I would engage in fantastical daydreaming about how neat this might be or how liberating living that way could be. To be frank I did not want to back myself into an emotional corner, to come to a conclusion contrary to where I was presently positioned in life and then not follow through.

No one wishes to face their own impotence, to fail their ‘self’ and then have nowhere to hide. It is best not to have tried rather than fail and be unmasked and miserable. Sometimes we are most embarrassed and ashamed when bare naked and fully exposed to our self.

This is the deeply conditioned slave mentality which I and so many others struggle with, a perspective that helps to explain quite well the present state of the zombie nation. We dull the ever present pain of our own failures with food, drink, drugs, TV, work, whatever it takes to forget if only for another moment more.

Centered Bench

I did know that I was growing increasingly unhappy with my chosen profession and I wanted out. But like a deer in the headlights I was frozen in place and unable to make any significant decisions because of all the entanglements, real or otherwise, that I thought were tying me down.

Some I believed were financial, some physical, some emotional, but all were blown way out of proportion to the reality I was trying to avoid. One must build the walls of our own cage higher than we are willing to climb if we are to remain safely confined within our own mind.

In short I was unhappy enough to think about radical change, but just content enough (‘sated’ is probably a much better term to use here) with the status quo that I didn’t wish to upset my carefully stacked house of cards. Who really wants to gather up all their Jacks and fling them high into the air in order to see what comes up when they all fall down?

Mostly this was because I had never honestly asked myself “What it is that I desire most” or “How would I like to live”? Instead I would ask myself the normal questions society directs us towards; what is it that I want to ‘do’, or what do I want to ‘be’ when I grow up, get out of school, change careers or retire?

Think about one of the first questions you ask a stranger you are meeting for the first time in a casual social setting. Or what is asked of you during that same social function. “So….what do you do”? The honest answer is that we live in our own mental straitjacket with our body and life dragged along, securely attached via our own carefully constructed ball and chain.

For most of us the ‘life’ decision process, at least initially, works in reverse. We start off listing what it is we don’t want and move forward from there. And the number one item at the top of most lists of undesirables is the following……“I don’t wish to be poor”.

Since we are forever focused on the ‘Money Meme’ every decision radiates out from that central focal point. It may help to remember that the all controlling money meme permeates so deeply into our childhood that the tooth fairy brings money in exchange for recently removed used body parts.

Centered Ceiling

OK………well, if I don’t wish to be poor I will ‘need’ (as opposed to ‘want’) a good education followed by a decent job to start my career, then marriage, kids, cars, house etc. Before we know it our exercise wheel is up to speed and we are off to the races on our never ending run to nowhere.

Back in 1990 I changed everything in my life after nearly two decades wasted. Because I headed off the deep end just after graduating from high school, rather than money being my central focus it was another equally damaging obsession that I revolved around.

Seventeen years later, my life in tatters by my own hand but still well along in the process of living, I struggled to move forward while balancing single parenthood demands with the need to earn a living.

The decisions I made at that point suited my life situation, not my happiness. I did what needed to be done to finish raising my son, who was then only five years of age, and to begin the process of cleaning up the mess I had created which trailed far behind me.

When the time came for my son to leave home and move on, essentially thirteen years later with me still single and uninvolved, I settled in to begin the serious work of examining the world around me, something I never fully pursued earlier since life was demanding my attention after I finally got my act together.

Back in 1990 after I awoke from my stupor, I saw contradictions and cognitive dissonances as far as the eye could see, but I deliberately chose not to look too deep in order to maintain some semblance of stability in my son’s life, not to mention my own. It was years, actually more than a decade, before I felt stable enough to really begin to deeply examine what I perceived as wrong with the world.

Once we begin the process of questioning everything, eventually we begin to seriously question ourselves, a course of action that often derives its value from the procedure itself rather than any actual results obtained. If we find the courage to travel far enough down the rabbit hole we find ourselves face to face with……….well, with our ‘self’. It is then that we reach a decision point unlike any we have encountered up to this point in our lives.

Do we travel a path, the path, any path that ultimately frees us from ourselves (or at least gets us a little bit closer), one which opens up an entirely new panorama of choices, the road less traveled if you will? Or do we look into the abyss, experience only disorientation and fear, then rapidly retreat to the perceived safety of our existing familiar surroundings.

Centered Gear

If we have remained in a continuous state of low level pain for a long enough period of time, the prospect of making radical changes in order to relieve that pain is not as inviting as it might seem at first blush. The elevated level of pain we mentally and emotionally project that will result from the change is nearly always believed to be much worse than it actually turns out to be.

A perfect example of this is the person with a nagging toothache who is frightened of the dentist. On an accumulated basis that person might experience ten times more pain over a month’s time before finally capitulating to the inevitable trip to the dentist, rather than if he had just ripped the tooth out at home with some pliers. Procrastination is just as much a process of bargaining with ourselves as it is fear and consequence avoidance.

This isn’t to say that one must change everything in order to begin the process of being true to oneself. Becoming personally sovereign in the middle of an insane asylum is a journey at best and not a destination. One can never be truly clean when we wash in filthy water, but we can begin to filter the water and improve the conditions under which we bathe.

The thing is that the end result for many who go down this road is not a product of any one decision, but of a series of half steps and reluctant conclusions that lead to a fundamental recognition. Eventually we come to understand that if we are to be true to ourselves we can no longer live in the manner we currently are. It is then that we discover if we have the courage to take a chance and move deeper down into the rabbit hole, or do we scurry away back to the perceived safety of the herd’s insanity.

I say this not to be judgmental of anything the reader is or is not doing. I live in a very fragile glass house with no intention of throwing stones or examining the quality of your life’s construction. Nor do I claim to have arrived at my destination and thus am qualified to give advice and direction. What I am doing works for me, and most likely will not work for you precisely because we are all unique individuals with distinctively different needs and life situations.

While I have clearly stated that personal sovereignty is a ‘State of Mind’, meaning we adopt a particular mindset that fully encompasses total personal responsibility for our ‘self’, it also requires that we be more centered than most of us presently are. If we are unhappy with our lives, or if we are in denial about our unhappiness which simply pushes us further and further away from our center, trying to adopt the personal sovereignty mindset is nearly impossible.

Take that first step; reassess where you are and why you aren’t somewhere else. Look deeply, ask those difficult questions of your ‘self’, push your outer boundaries and scale those cognitive walls. You have little to lose and everything to gain…..including your centering. Deliberately and consciously push that start button and begin the process within your ‘self’.

 

03-16-2014

Cognitive Dissonance

 

www.TwoIceFloes.com is unlike anything you will find on the web, a truly unique destination. There you will find distinctive Premium Members only articles as well as discussions on wellness and health, homesteading, spirituality & philosophy and most importantly ‘safe’ forums not found anywhere else. Come by for a peek and stay a while.

 

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The Crimean Referendum Vote: A Photo Summary

The much anticipated, if largely moot, Crimean referendum vote whether to break away from Ukraine and join Russia, began early on Sunday, even as Kiev is accusing Moscow of rapidly building up its armed forces on the peninsula in “crude violation” of an international treaty.

According to Reuters, Ukrainian acting defence minister Ihor Tenyukh said Russian troop numbers in Crimea were now almost double the level agreed with Moscow, and Kiev’s forces were taking “appropriate measures” along the border with Russia. Tenyukh dismissed any suggestion that a militarily and economically weakened Ukraine might give up in the face of the Russian power. “Decisions will be taken depending on how events unfold. But let me say once again that this is our land and we will not be leaving it,” he told Interfax news agency.

In the meantime, the vote has begun: “I have voted for Russia,” said Svetlana Vasilyeva, a veterinary nurse who is 27. “This is what we have been waiting for. We are one family and we want to live with our brothers.”

Last month’s fall of Moscow-backed Ukrainian President Viktor Yanukovich following deadly protests in Kiev has aroused fears among some of the country’s native Russian-speakers.

“We want to leave Ukraine because Ukrainians told us that we are people of a lower kind. How can you stay in such a country?” said Vasilyeva.

Polling stations opened at 8 a.m. (0600 GMT) and close 12 hours later. Provisional results will be released late on Sunday with the final tally expected a day or two later.

Crimea’s 1.5 million voters have two options: union with Russia or giving their region, which is controlled by pro-Kremlin politicians, the broad right to determine its own path and choose relations with whom it wants – including Moscow.

Polling stations opened at 8 a.m. (0600 GMT) and close 12 hours later. Provisional results will be released late on Sunday with the final tally expected a day or two later. According to Bloomberg, as of noon, the vote turnout at 44%, citing Crimean referendum chief Mikhail Malyshev in Simferopol. Malyshev also reported that the Sevastopol turnout at 49% at noon, adding that no voting violations reported. The Crimean deputy PM said that he expects an 80%+ turn out in the vote with over 80% voting in favor of joining Russia.

Those curious what the Ukrainians are thinking:

So even as the vote which is merely a placeholder as Russia continues its military build up in the Crimea, Russian troops keep piling along the Eastern border, and with headlines like this hitting the tape:

  • DEFENCE MINISTRIES OF UKRAINE, RUSSIA, AGREE TRUCE IN CRIMEA UNTIL MARCH 21-ACTING UKRAINIAN DEFENCE MINISTER

It probably means Russia still hasn’t amassed enough troops to continue its business in East Ukraine.

Meanwhile, this is how the vote looked like through the eyes of photographers:


    



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Every Chart You Should Be Tracking But Were Too Afraid To Find

A series of crises, the latest being the ominous developments in the Ukraine and further evidence of disappointing growth in China, have rattled financial markets. Of course, with all major central banks at amazingly easy policy stances, the bet continues to be that the latest uncertainties will also pass. That may be true once again. But, as Abe Gulkowitz lays out in the inimitable style of his The Punch Line letter, one must recognize that many of the serious flaws uncovered in each of the predicaments will linger for years to come and that the policy remedies have at best covered up the fundamental issues without completely resolving them.

Even in the U.S., the best of all major economies, the economy and financial markets still suffer from “lasting effects” of the Great Recession and seem yet to be able to muster up enough momentum to get back up to previous robust growth rates, especially for job growth. And the massive easing itself is likely to have its own potential for unintended consequences.

Serious and surprising weakness in emerging economies may also jeopardize growth trajectories for global recovery. The exposure emanates out of the greater vulnerability that world trade and growth have today from these super performing emerging economies.

This is particularly true for China, which by now has a stronger impact on the world’s economy, supply chains, commodity markets and world currencies. China is a key issue. Weaker growth, a complexity of debt issues, and awkward demographics, all combine to raise issues regarding the outlook. China’s debts are troubling – and not just because they’re alarmingly big. Amplifying the concerns is the complexity of those debts. That’s the trouble with China’s lengthening “credit chains”.

And in Europe, markets roared back as the euro crisis seemed to recede in the face of policy support. Yet basic job growth seems to be far behind. Unemployment is undermining many countries in the EU, not just massive debt levels. The unemployment is particularly severe for most of the younger age groups. Fertility rates are very low, and life expectancy keeps rising — trends that underpin the conundrum of demographic ageing. Even those countries performing relatively well are retaining a cautious stance about future prospects, and those performing poorly are still short of new ideas — and, in many cases, the adequate financial wherewithal — to alleviate weak growth prospects.

 

Full letter below in all its chartapalooza glory…

 

TPL Mar 13 14


    



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Crimea’s Economy Summarized

As the clock ticks down to tomorrow's Crimea referendum, where residents will vote to align with Russia or to stay in Ukraine, Russia Today looks at what the sunny Black Sea peninsula can offer economically and what ties it has with Moscow and Kiev. At first glance, Crimea has certain problems – a lack of energy, and more dangerously, freshwater resources. The republic's annual GDP is only $4.3 billion – 500 times smaller than the size of Russia’s $2 trillion economy. However, whatever the results of the referendum are, fixing the dilapidated state of infrastructure and transport could offer a real investment opportunity for both Russian companies and Crimean entrepreneurs.

 

 

But Tourism and Energy are key to its future:

Tourism

The backbone of Crimea’s local economy is its bustling tourist industry, which draws in 6 million visitors per year during the summer season. But currently, 70 percent of the tourists are from Ukraine, and only 25 percent from Russia. Political rifts between Russia and Ukraine could turn off tourists, with tourism expected to drop by 30 percent this year.

However, if Crimea becomes a part of Russia it’ll become a more attractive holiday destination for Russia’s population of 142 million, whose per capita income is more than three times Ukrainians', according to World Bank estimates.

The average Ukrainian salary was 3148 Hryvna per month ($331) in February 2014, according to the Ukrainian Bureau of Statistics. In Crimea, the average is 2693 Hryvna ($283), whereas in Kiev, workers make nearly double, 4783 Hryvna ($503).

Oil and Gas prize

The big economic prize in Crimea lies to the south, in the Black Sea natural gas fields.

Extraction from these fields has the potential to be substantial – up to 7 million tons in annual production capacity, by Bloomberg estimates.

US ExxonMobil and UK/Dutch Shell have also been in talks with Ukraine about deepwater offshore oil drilling, but the only problem is, all this oil is located under Crimean waters. The deal is estimated at $1 billion.

ExxonMobil’s Black Sea offshore plans are currently on hold, senior vice president Andrew Swiger told investors at an early March meeting.

On Thursday, Crimea’s authorities took under their umbrella Ukrainian oil and gas fields in the Black and Asov seas, according to the speaker of Crimea’s parliament, Vladimir Konstantinov.

He supports Russia’s Gazprom taking control of the oil and gas assets.

"Russia, and Gazprom, should take care of the oil and gas production. It's not our issue," said Konstantinov, as quoted by RIA Novosti.

 

But as Russia Today notes, Sergey Aksyonov, Crimea’s Prime Minister and an advocate of joining Russia, has the hope that breaking away from Ukraine will transform the economy for the better. Aksyonov cited Singapore, which is an independent city-state, as an example to follow.

Crimea may not follow the same success path, but an option to boost growth is to make Crimea a special economic zone – with less taxes and financial regulation – which could spur growth and attract foreign investment. In 2005, Russia passed a law that allows for special economic zones, and has toyed with setting one up in the Far East, but so far, none have been established.


    



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If You Are Considering Buying A House, Read This First

In September of 2011, when looking at the insurmountable debt catastrophe that the world finds itself (which has only gotten worse in the past several years) we warned that “the only way to resolve the massive debt load is through a global coordinated debt restructuring (which would, among other things, push all global banks into bankruptcy) which, when all is said and done, will have to be funded by the world’s financial asset holders: the middle-and upper-class, which, if BCS is right, have a ~30% one-time tax on all their assets to look forward to as the great mean reversion finally arrives and the world is set back on a viable path.”

Two years later, the financial asset tax approach, in the form of depositor bail-ins, was tried – successfully (as there was no mass rioting, no revolution, in fact the people were perfectly happy to accept the confiscation of their savings) – in Cyprus, further emboldening the status quo, in this case the IMF, to propose, tongue in cheek, that the time has come for the uber-wealthy to give back some (“it’s only fair”), and to raise income taxes through the roof (which of course would mostly impact the middle class as the bulk of current income for the 1% is in the form of dividend income, ultra-cheap leverage extraction on assets and various forms of carried interest).

And now, a new tax is not only on the horizon but coming fast and furious to allow the insolvent global regime at least one more can kicking: one which will impact current and future homeowners across the world.

But first, let’s step back.

Last week, the IMF did what only the IMF could do: come to the realization that we proposed in 2009, and even the Davosites discussed earlier this year: namely that the middle class is effectively an endangered species, and rapidly on its way to wholesale extinction, and that the polarity between the rich and poor has never been greater. The IMF concluded, with the panache that only this comical organization is capable of, that income inequality “is weighing on global economic growth and fueling political instability.”

The WSJ reports:

The International Monetary Fund’s latest salvo came Thursday in a top official’s speech and a 67-page paper detailing how the IMF’s 188 member countries can use tax policy and targeted public spending to stem a rising disparity between haves and have-nots.

 

IMF Managing Director Christine Lagarde has made the issue a high priority for the fund, warning—along with some of the fund’s most powerful shareholders—that inequality is threatening longer-run economic prospects. Last month, Ms. Lagarde said the income gap risked creating “an economy of exclusion, and a wasteland of discarded potential” and rending “the precious fabric that holds our society together.”

The IMF’s solution? The same as that of socialists everywhere: redistribute the wealth… because apparently socialism works every time, all the time, with stellar results.

“Redistribution can help support growth because it reduces inequality,” David Lipton, the fund’s No. 2 official and a former senior White House aide, said in a speech Thursday at the Peterson Institute for International Economics. “But if misconceived, this trade-off can be very costly.”

 

“There’s a sense that the burdens of the crisis have been unevenly distributed, that the middle classes and the poor have footed more of the bill of the crisis than the economic elite,” said Moisés Naím, a senior economist at the Carnegie Endowment for International Peace and Venezuela’s former trade minister.

Oh is there a sense? Is that why the Fed has halted its QE program which takes from what little is left of the middle class and gives to those who already have more money than they can spend in several lifetimes. Guess not.

So how does the IMF suggest going about this wholesale, global socialist revolution? Simple: the way we explained nearly three years ago.

The IMF’s latest paper doesn’t prescribe country-specific measures, but it does offer several proposals that are likely to be controversial. Most notably, the IMF says many advanced and developing economies can narrow inequality by more aggressively applying property taxes and “progressive” personal income taxes that rise as incomes increase.

 

The median top personal income-tax rate across the globe has halved since the 1980s to around 30%. But the IMF says “revenue-maximizing [personal income tax] rates are probably somewhere between 50% and 60% and optimal rates probably somewhat lower than that.”

We wouldn’t be too concerned about income taxes. After all, one needs to have a job to have income, and as everyone knows by now, jobs also are on their way to extinction, and every central bank everywhere will merely print the money needed to cover the income tax shortfall, leading to that “other” alternative to fixing the debt problem: global hyperinflation (with a little precious metals confiscation on the side: just like FDR did in the 1930s).

But going back to the original point, here is why those in the market for a house should be worried. Very worried. From page 40 of the IMF’s paper on “Fiscal Policy and Income Inequality“:

Some taxes levied on wealth, especially on immovable property, are also an option for economies seeking more progressive taxation. Wealth taxes, of various kinds, target the same underlying base as capital income taxes, namely assets. They could thus be considered as a potential source of progressive taxation, especially where taxes on capital incomes (including on real estate) are low or largely evaded. There are different types of wealth taxes, such as recurrent taxes on property or net wealth, transaction taxes, and inheritance and gift taxes. Over the past decades, revenue from these taxes has not kept up with the surge in wealth as a share of GDP (see earlier section) and, as a result, the effective tax rate has dropped from an average of around 0.9 percent in 1970 to approximately 0.5 percent today. The prospect of raising additional revenue from the various types of wealth taxation was recently discussed in IMF (2013b) and their role in reducing inequality can be summarized as follows.

  • Property taxes are equitable and efficient, but underutilized in many economies. The average yield of property taxes in 65 economies (for which data are available) in the 2000s was around 1 percent of GDP, but in developing economies it averages only half of that (Bahl and Martínez-Vázquez, 2008). There is considerable scope to exploit this tax more fully, both as a revenue source and as a redistributive instrument, although effective implementation will require a sizable investment in administrative infrastructure, particularly in developing economies (Norregaard, 2013).

And there you have it: if you are buying a house, enjoy the low mortgage (for now… and don’t forget – if and when the time comes to sell, the buyer better be able to afford your selling price and the monthly mortgage payment should the 30 Year mortgage rise from the current 4.2% to 6%, 7% or much higher, which all those who forecast an improving economy hope happens), but what will really determine the affordability of that piece of property you have your eyes set on, are the property taxes.

Because they are about to skyrocket.


    



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

Maduro Warns Venezuelan Protesters “We Are Coming For You”; Calls John Kerry A “Murderer”

As the daily street protests grow bloodier and bloodier, Venezuelan President Maduro has escalated his comments today, exclaiming that he "won't be bullied," and warning "prepare yourself, we are coming for you," if protesters don't "go home within hours."

  • *VENEZUELAN PROTESTERS HAVE 'HOURS' TO CLEAR BARRICADES: MADURO
  • *MADURO SAYS HE'LL SEND ARMED FORCES TO 'LIBERATE' PROTEST AREAS

With 28 dead in the last month of protests, things are very serious but as we warned previously, Maduro still enjoying the support of the poor – as EuroNews reports, it appears he is not going anywhere soon. John Kerry also came under fire as the foreign minister called him "a "murderer of the Venezuelan people," accusing him of encouraging the protests.

 

 

As Bloomberg reports,

Venezuela President Nicolas Maduro says he will send armed forces to clear barricaded areas if "protesters don’t go home within hours."

"Prepare yourself, we are coming for you," Maduro tells soldiers at army event in Caracas

Plaza Altamira in eastern Caracas, the center of the protests, first to be “liberated,” Maduro says

As tensions with the US continue to rise:

The United States on Friday brushed aside "absurd" accusations by Venezuelan President Nicolas Maduro that it was meddling in the country's internal affairs by intervening in anti-government protests.

 

Venezuela's foreign minister Elias Jaua had earlier called top US diplomat John Kerry a "murderer of the Venezuelan people," accusing him of encouraging the protests that have killed 28 people in five weeks.

 

"The solution to Venezuela's problems lies in democratic dialogue among Venezuelans, not in repression or in hurling verbal brickbats at the United States," a state department official said on condition of anonymity.

 

"Venezuela's government needs to focus on solving its growing economic and social problems, not on making absurd allegations against the United States."

 

Maduro, however, charged that "the desperate government interventionism of the United States is clear."

 

"There's a slew of statements, threats of sanctions, threats of intervention. There has been lobbying by the highest officials in the US government," he said.

 

As Stratfor notes, these protests could mark a turning point as the economic situation deteriorates there is a chance that protests like this could begin to generate additional social momentum in rejection of the status quoPerhaps things could be changing for Maduro…

Relatively large student-led opposition protests convened in Caracas, Valencia, Maracaibo and many other cities throughout the country. Rough Stratfor estimates put the crowd in Caracas at between 15,000-20,000 people based on aerial photos posted on social media. Venezuela's students are very politically active and protests are frequent. However, the relatively large turnout and widespread geographic distribution of this week's protests indicate that the movement may be gaining traction.

 

The challenge that the student movement will face is in finding a way to include Venezuela's laboring class, which for the most part still supports the government, and relies on its redistributive policies. Their inability to rouse broad support across Venezuela's social and economic classes was in part why previous student uprisings, including significant protests in 2007, failed to generate enough momentum to trigger a significant political shift.

 

But the situation has changed in Venezuela, and as the economic situation deteriorates there is a chance that protests like this could begin to generate additional social momentum in rejection of the status quo. President Nicolas Maduro has been in office for less than a year, and in that time the inflation rate has surged to over 50 percent and food shortages are a daily problem. Though firmly in power, the Chavista government is still struggling to address massive social and economic challenges. Massive government spending, years of nationalization and an overreliance on imports for basic consumer goods have radically deteriorated inflation levels, and undermined industrial production.

 

How the government responds will play a key role in the development of these protests going forward. The government cannot afford to crack down too hard without risking even worse unrest in the future. For its part, the mainstream opposition must walk a careful line between supporting the sentiment behind open unrest and being seen as destabilizing the country. Maduro retains the power to punish opposition politicians, and reaffirmed that Feb. 11 when he stated on national television that he intends to renew the law allowing him to outlaw political candidates who threaten the peace of the country. The statement was a clear shot over the bow of opposition leaders, and may foreshadow a more aggressive government policy designed to limit political opposition.

Perhaps it is the use of armed forces directly and aggressively that will roil the "poor"'s perspective – we will see


    



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“Obama Did Not Attend The Meeting”, Or In A Moment Of Crisis The President Stands Resolute

… in the sand trap.

Spot the pattern. From March 1, 2014, the day Russia announced it would send armed forces in Crimea:

President Barack Obama’s national security team met on Saturday for an update on the situation in Ukraine and to discuss potential policy options, a senior Obama administration official said. The meeting came as Ukraine asked the United States and other key members of the U.N. Security Council to help safeguard its territorial integrity after Russia announced plans to send armed forces into the country’s autonomous Crimea region. 

 

Obama did not attend the meeting, but he has been briefed about it by his national security adviser, Susan Rice, and his national security team, an official said.

Fast forward to today, March 15, 2014, the day Russia is said to have “invaded” East Ukraine, and the day before Crimea’s critial referendum which may cement the second coming of the Cold War.

President Barack Obama’s national security team discussed the Ukraine crisis in a session at the White House on Saturday after Secretary of State John Kerry’s return from talks with his Russian counterpart in London.

 

Obama did not attend the meeting but was being briefed about it and other developments involving Ukraine, said Laura Lucas Magnuson, a spokeswoman for the White House National Security Council.

Because obviously there are more pressing matters at hand like pitching Obamacare to toddlers, and because there is always time for 18 holes before World War III. And let’s not forget, nobody does a better job of explaining to Vladimir Vladimirovich the “costs” of showing the world just how much of a laughing stock US foreign policy has become.


    



via Zero Hedge http://ift.tt/1o96A28 Tyler Durden