Tag: finance

When we previewed the initial “massive devastation” aftermath of typhoon Haiyan yesterday, when the casualties resulting from the strongest storm to ever make landfall were “only” 1200, we had a feelilng that the final tally would be far worse. And so it is: a day later, the incoming reports confirm that by the time the final death toll is calculated it will probably be one for the record books, because at last the dead had risen to a massive 10,000 and were increasing exponentially.

The latest tally comes from Reuters, according to which, “one of the most powerful storms ever recorded killed at least 10,000 people in the central Philippines, a senior police official said on Sunday, with huge waves sweeping away coastal villages and devastating one of the main cities in the region.” “We had a meeting last night with the governor and the other officials. The governor said, based on their estimate, 10,000 died,” Soria told Reuters. “The devastation is so big.”

“From a helicopter, you can see the extent of devastation. From the shore and moving a kilometer inland, there are no structures standing. It was like a tsunami,” said Interior Secretary Manuel Roxas, who had been in Tacloban since before the typhoon struck the city. “I don’t know how to describe what I saw. It’s horrific.”

Needless to say, Haiyan makes Sandy pale by comparison: 70 to 80 percent of structures in its path as it tore through Leyte province on Friday, said police chief superintendent Elmer Soria, before weakening and heading west for Vietnam.

“People are walking like zombies looking for food,” said Jenny Chu, a medical student in Leyte. “It’s like a movie.” As rescue workers struggled to reach ravaged villages along the coast, where the death toll is as yet unknown, survivors foraged for food or searched for lost loved ones.

 

Witnesses and officials described chaotic scenes in Leyte’s capital, Tacloban, a coastal city of 220,000 about 580 km (360 miles) southeast of Manila which bore the brunt, with hundreds of bodies piled along roads and pinned under wrecked houses.

 

The city lies in a cove where the seawater narrows, making it susceptible to storm surges.

 

The city and nearby villages as far as one kilometer (just over half a mile) from shore were flooded, leaving floating bodies and roads choked with debris from fallen trees, tangled power lines and flattened homes.

And just as in the case of Sandy, the biggest threat from the storm turned out to be not the winds but the water surge which gave the storm a tsunami-like feel and flooded all low-lying territories.

Most of the deaths appear to have been caused by surging sea water strewn with debris that many said resembled a tsunami, leveling houses and drowning hundreds of people in one of the worst disasters to hit the typhoon-prone Southeast Asian nation.

 

About 300 people died in neighboring Samar province, where Haiyan first hit land on Friday as a category 5 typhoon, with 2,000 missing, said a provincial disaster agency official.

 

Nearly 480,000 people were displaced and 4.5 million “affected” by the typhoon in 36 provinces, the national disaster agency said, as relief agencies called for food, water, medicines and tarpaulins for the homeless.

 

International aid agencies said relief efforts in the Philippines were stretched thin after a 7.2 magnitude quake in central Bohol province last month and displacement caused by a conflict with Muslim rebels in southern Zamboanga province.

And when disaster strikes poor nations, looting is sure to follow, as does martial law.

Looters rampaged through several stores in Tacloban, witnesses said, taking whatever they could find as rescuers’ efforts to deliver food and water were hampered by severed roads and communications. A TV station said ATM machines were broken open.

 

Mobs attacked trucks loaded with food, tents and water on Tanauan bridge in Leyte, said Philippine Red Cross chairman Richard Gordon. “These are mobsters operating out of there.”

 

President Benigno Aquino said the government had deployed 300 soldiers and police to restore order and that he was considering introducing martial law or a state of emergency in Tacloban to ensure security. “Tonight, a column of armored vehicles will be arriving in Tacloban to show the government’s resolve and to stop this looting,” he said.

 

Aquino has shown exasperation at conflicting reports on damage and deaths and one TV network quoted him as telling the head of the disaster agency that he was running out of patience.

 

“How can you beat that typhoon?” said defense chief Voltaire Gazmin, when asked whether the government had been ill-prepared. “It’s the strongest on Earth. We’ve done everything we can, we had lots of preparation. It’s a lesson for us.”

 

…

 

Many tourists were stranded. “Seawater reached the second floor of the hotel,” said Nancy Chang, who was on a business trip from China in Tacloban City and walked three hours through mud and debris for a military-led evacuation at the airport.

 

“It’s like the end of the world.”

 

Six people were killed and dozens wounded during heavy winds and storms in central Vietnam as Haiyan approached the coast, state media reported, even though it had weakened substantially since hitting the Philippines.

It is truly stunning just how brittle the stability of society becomes once the “just in time” amentites everyone takes for granted, disappear without a trace.

Worst of all, the Philippines could be just the beginning: Vietnam is next, as is the very densely populated region of southern China. “Vietnam authorities have moved 883,000 people in 11 central provinces to safe zones, according to the government’s website.”

Raw video of the storm via Bloomberg:

Finally, some additional photos of the aftermath.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_Y24g1tFsrM/story01.htm Tyler Durden

.

 

What’s this about?

Google are now forcing everyone with YouTube accounts to activate G+ accounts.

Apparently, you can no longer comment there without signing in via a G+ account.

I will move all of my video activity in the future to Vimeo.

Try as they may, I have resisted this up until now.

They have already been trying to shovel every gmail account into G+ for months.

Ultimately they want everyone to have a G+ account linked to a name verified with a cell phone number.

And I am sure there are plenty of idiots happy to go along with that idea.

This is what I find particularly insidious about the whole thing.

I, however, am G-Minus.

Sooooo….

Fuck you Google Plus!

And kudos to @EmmaBlackery

.

 

 

 

.

 

 

 

.

 

 

 

.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_agdnDbMeN0/story01.htm williambanzai7

Having watched Mike Maloney’s “Secrets Of Money” series (Part 1, Part 2, Part 3, and Part 4 here), Chris Martenson discusses the critical aspects of the must-watch episodes. Crucially, as we enter a period of apparent Nirvanic equity markets (and dystopian ‘real’ economics), Martenson’s points on the “unnecessarily complex monetary system” that we have today are summed up by his statement that “there is nothing more important that understanding how our money system operates… and why it will fail us.”

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bqfN_G9ak0I/story01.htm Tyler Durden

Having watched Mike Maloney’s “Secrets Of Money” series (Part 1, Part 2, Part 3, and Part 4 here), Chris Martenson discusses the critical aspects of the must-watch episodes. Crucially, as we enter a period of apparent Nirvanic equity markets (and dystopian ‘real’ economics), Martenson’s points on the “unnecessarily complex monetary system” that we have today are summed up by his statement that “there is nothing more important that understanding how our money system operates… and why it will fail us.”

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bqfN_G9ak0I/story01.htm Tyler Durden

The chief of the Federal Aviation Administration predicted Thursday that U.S. airspace could be crowded with as many as 7,500 commercial drones within the next five years. As The Washington Times reports, Michael Huerta said his agency would set up six sites across the country to test drone operators and, in an effort to balance privacy/safety with anarchic airspace drone pollution, he added, “we must fulfill those obligations in a thoughtful, careful manner that ensures safety and promotes economic growth, ” as dangerous incidents involving drones have already taken place…

Although they are expected to be used for peaceful purposes such as firefighting and weather tracking – it’s causing a lot of concern, as Huerta warns “we need to be responsive to public concerns about privacy.” 

You’ll never notice it from the ground, but the skies above the US are crowded with roughly five thousand planes at any given moment. The daily total of movements, is up to a whopping 90,000. And dangerous incidents involving drones have already taken place there – as Gayane Chichakyan reveals…

Via Russia Today,

Within the next five years, after appropriate regulations are introduced, whole 7,500 small UAVs will be operating in US airspace, FAA Administrator Michael Huerta said at an aerospace news conference in Washington on Thursday.

 

Huerta outlined the ultimate goal of the American drone industry: global leadership that could enable the US to set standards for the industry worldwide.

 

“We recognize that the expanding use of unmanned aircraft presents great opportunities, but it’s also true that integrating these aircraft presents significant challenges,”

 

…

 

Huerta shared some interesting statistics on who is using drones in the US the most. He mentioned that apart from synoptics, environmental specialists and educational institutions, there are about 80 law enforcement agencies that operate small size surveillance drones, with the FAA granting each of them public use waivers on a case-by-case basis.

 

“If we’re going to take full advantage of the benefits that we’re talking about from these technologies, we need to be responsive to public concerns about privacy,” Huerta said.

 

Reportedly, not only the FAA, but also Pentagon, the Department of Homeland Security (DHS) and the Department of justice are taking part in a multi-agency group that has also released a comprehensive plan accelerating integration of UAVs into US national airspace. All data gathered by the six test sites will go straight to that interagency group, Huerta said.

And focused on privacy…
(via The Washington Times)

The Association for Unmanned Vehicle Systems, the leading trade group for the nation’s private-sector drone operators, estimated this year that the commercial drone industry will create more than 100,000 jobs and generate more than $82 billion in economic impact over the next 10 years — if the government moves quickly to establish workable operating regulations and safeguards.

 

The impending boom has raised concerns among privacy advocates about how and where drones might be used to collect data. The FAA is requiring future test sites to develop privacy plans and make them available to the public. The policy also requires test site operators to disclose how data will be obtained and used.

 

“Make no mistake about it, privacy is an extremely important issue and it is something that the public has a significant interest and concern over and we need to recognize as an industry that if we are going to take full advantage of the benefits that we are talking about for these technologies we need to be responsive to the public’s concerns about privacy,” Mr. Huerta said.

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/pqN_rWgaY5g/story01.htm Tyler Durden

Submitted by Charles Hugh-Smith via Peak Prosperity,

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4KNax8jV2Yw/story01.htm Tyler Durden

While the so-called “bulk spying” of the NSA is major privacy issue, Mises Media’s Mark Thornton explains that the unintended consequences of this surveillance invasion has real economic implications…

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/82FvyowfdEc/story01.htm Tyler Durden

While the so-called “bulk spying” of the NSA is major privacy issue, Mises Media’s Mark Thornton explains that the unintended consequences of this surveillance invasion has real economic implications…

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/82FvyowfdEc/story01.htm Tyler Durden

Authored by Lawrence Kotlikoff, via Yahoo Exchange blog,

In his parting act, Federal Reserve Chairman Ben Bernanke has decided to continue printing some $85 billion per month (6% of GDP per year) and spend those dollars on government bonds and, in the process, keep interest rates low, stimulate investment, and reduce unemployment. Trouble is, interest rates have generally been rising, investment remains very low, and unemployment remains very high. As Lawrence Kotlikoff points out, echoing our perhaps more vociferous discussions, Bernanke’s dangerous policy hasn’t worked and should be ended. Since 2007 the Fed has increased the economy’s basic supply of money (the monetary base) by a factor of four! That’s enough to sustain, over a relatively short period of time, a four-fold increase in prices. Having prices rise that much over even three years would spell hyperinflation.

The Treasury dance

And while Bernanke says this is all to keep down interest rates, there is a darker subtext here. When the Treasury prints bonds and sells them to the public for cash and the Fed prints cash and uses it to buy the newly printed bonds back from the public, the Treasury ends up with the extra cash, the public ends up with the same cash it had initially, and the Fed ends up with the new bonds.

Yes, the Treasury pays interest and principal to the Fed on the bonds, but the Fed hands that interest and principal back to the Treasury as profits earned by a government corporation, namely the Fed. So, the outcome of this shell game is no different from having the Treasury simply print money and spend it as it likes.

The fact that the Fed and Treasury dance this financial pas de deux shows how much they want to keep the public in the dark about what they are doing. And what they are doing, these days, is printing, out of thin air, 29 cents of every $1 being spent by the federal government.

QE an unsustainable practice

I have heard one financial guru after another discuss Quantitative Easing and its impact on interest rates and the stock market, but I’ve heard no one make clear that close to 30 percent of federal spending is now being financed via the printing press.

That’s an unsustainable practice. It will come to an end once Wall Street starts to understand exactly how much money is being printed and that it’s not being printed simply to stimulate the economy, but rather to pay for the spending of a government that is completely broke — with long-term expenditures obligations that exceed its long-term tax revenues by $205 trillion!

This present value fiscal gap is based on the Congressional Budget Office’s just-released long-term Alternative Fiscal Scenario projection. Closing this fiscal gap would require a 57 percent immediate and permanent hike in all federal taxes — starting today!

Prices will rise

When Wall Street wises up to our true fiscal condition (and some, like Bill Gross, already have), it will dump long-term bonds like hot potatoes. This will lead interest rates to jump and make people and banks very reluctant to hold money earning no return. In trying to swap their money for goods and services, the public will drive up prices.

As prices start to rise and fingers start pointing at the Fed for fueling the inflation, QE will be brought to an abrupt halt. At that point, Congress will have to come up with an extra 6 percent of GDP on a permanent basis either via huge tax hikes or huge spending cuts. Another option is simply to borrow the 6 percent. But this would raise the deficit, defined as the increase in Treasury bonds held by the public, from 4 to 10 percent of annual GDP if we take 2013 as the example. A 10 percent of GDP deficit would raise even more eyebrows on Wall Street and put further upward pressure on interest rates.

What are we waiting for?

But why haven’t prices started rising already if there is so much money floating around? This year’s inflation rate is running at just 1.5 percent. There are three answers.

First, three quarters of the newly created money hasn’t made its way into the blood stream of the economy – into M1 – the money supply held by the public. Instead, the Fed is paying the banks interest not to lend out the money, but to hold it within the Fed in what are called excess reserves.

Since 2007, the Monetary Base – the amount of money the Fed’s printed – has risen by $2.7 trillion and excess reserves have risen by $2.1 trillion. Normally excess reserves would be close to zero. Hence, the banks are sitting on $2.1 trillion they can lend to the private sector at a moment’s notice. I.e., we’re looking at a gi-normous reservoir filling up with trillions of dollars whose dam can break at any time. Once interest rates rise, these excess reserves will be lent out.

The fed says they can keep the excess reserves from getting lose by paying higher interest on reserves. But this entails poring yet more money into the reservoir. And if interest rates go sufficiently high, the Fed will call this practice quits.

As excess reserves are released to the economic wild, we’ll see M1, which was $1.4 trillion in 2007, rise from its current value of $2.6 trillion to $5.7 trillion. Since prices, other things being equal, are supposed to be proportional to M1, having M1 rise by 219 percent means that prices will rise by 219 percent.

But, and this is point two, other things aren’t equal. As interest rates and prices take off, money will become a hot potato. I.e., its velocity will rise. Having money move more rapidly through the economy – having faster money – is like having more money. Today, money has the slows; its velocity – the ratio GDP to M1 — is 6.6. Everybody’s happy to hold it because they aren’t losing much or any interest. But back in 2007, M1 was a warm potato with a velocity of 10.4.

If banks fully lend out their reserves and the velocity of money returns to 10.4, we’ll have enough M1, measured in effective units (adjusted for speed of circulation), to support a nominal GDP that’s 3.5 times larger than is now the case. I.e., we’ll have the wherewithal for almost a quadrupling of prices. But were prices to start moving rapidly higher, M1 would switch from being a warm to a hot potato. I.e., velocity would rise above 10.4, leading to yet faster money and higher inflation.

No easy exit

I hope you’re getting the point. Having addicted Congress and the Administration to the printing press, there is no easy exit strategy. Continuing on the current QE path spells even great risk of hyperinflation. But calling it quits requires much higher taxes, much lower spending, or much more net borrowing (with requisite future repayment) from the public. Yet weaning Uncle Sam from the printing press now is critical before his real need for a fix – paying for the Baby Boomers’ retirement benefits – kicks in.

The one caveat to this doom and gloom scenario is point three – increased domestic and global demand for dollars. The Great Recession put the fear of God into savers worldwide. And the fact that U.S. price level has risen since 2007 by only 15 percent whereas M1 has risen by 88 percent reflects a massive expansion of domestic and foreign demand for “safe” dollars. This is evidenced by the velocity of money falling from 10.4 to 6.6. People are now much more
eager to hold and hold onto dollars than they were six years ago.

If this increased demand for dollars persists, let alone grows, inflation may remain low for quite a while. But our ability to get Americans and foreigners to hand over real goods and services in exchange for very few green pieces of paper is hardly guaranteed once everyone starts to understand the incredible rate at which Uncle Sam is printing and spending this paper. Once everyone gets it into their heads that prices are taking off, individual beliefs will become collective reality. This brings me to my bottom line: The more money the Fed prints, the more it risks everyone starting to expect and, consequently produce, hyperinflation.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cGFUFBNh9ss/story01.htm Tyler Durden

Authored by Lawrence Kotlikoff, via Yahoo Exchange blog,

In his parting act, Federal Reserve Chairman Ben Bernanke has decided to continue printing some $85 billion per month (6% of GDP per year) and spend those dollars on government bonds and, in the process, keep interest rates low, stimulate investment, and reduce unemployment. Trouble is, interest rates have generally been rising, investment remains very low, and unemployment remains very high. As Lawrence Kotlikoff points out, echoing our perhaps more vociferous discussions, Bernanke’s dangerous policy hasn’t worked and should be ended. Since 2007 the Fed has increased the economy’s basic supply of money (the monetary base) by a factor of four! That’s enough to sustain, over a relatively short period of time, a four-fold increase in prices. Having prices rise that much over even three years would spell hyperinflation.

The Treasury dance

And while Bernanke says this is all to keep down interest rates, there is a darker subtext here. When the Treasury prints bonds and sells them to the public for cash and the Fed prints cash and uses it to buy the newly printed bonds back from the public, the Treasury ends up with the extra cash, the public ends up with the same cash it had initially, and the Fed ends up with the new bonds.

Yes, the Treasury pays interest and principal to the Fed on the bonds, but the Fed hands that interest and principal back to the Treasury as profits earned by a government corporation, namely the Fed. So, the outcome of this shell game is no different from having the Treasury simply print money and spend it as it likes.

The fact that the Fed and Treasury dance this financial pas de deux shows how much they want to keep the public in the dark about what they are doing. And what they are doing, these days, is printing, out of thin air, 29 cents of every $1 being spent by the federal government.

QE an unsustainable practice

I have heard one financial guru after another discuss Quantitative Easing and its impact on interest rates and the stock market, but I’ve heard no one make clear that close to 30 percent of federal spending is now being financed via the printing press.

That’s an unsustainable practice. It will come to an end once Wall Street starts to understand exactly how much money is being printed and that it’s not being printed simply to stimulate the economy, but rather to pay for the spending of a government that is completely broke — with long-term expenditures obligations that exceed its long-term tax revenues by $205 trillion!

This present value fiscal gap is based on the Congressional Budget Office’s just-released long-term Alternative Fiscal Scenario projection. Closing this fiscal gap would require a 57 percent immediate and permanent hike in all federal taxes — starting today!

Prices will rise

When Wall Street wises up to our true fiscal condition (and some, like Bill Gross, already have), it will dump long-term bonds like hot potatoes. This will lead interest rates to jump and make people and banks very reluctant to hold money earning no return. In trying to swap their money for goods and services, the public will drive up prices.

As prices start to rise and fingers start pointing at the Fed for fueling the inflation, QE will be brought to an abrupt halt. At that point, Congress will have to come up with an extra 6 percent of GDP on a permanent basis either via huge tax hikes or huge spending cuts. Another option is simply to borrow the 6 percent. But this would raise the deficit, defined as the increase in Treasury bonds held by the public, from 4 to 10 percent of annual GDP if we take 2013 as the example. A 10 percent of GDP deficit would raise even more eyebrows on Wall Street and put further upward pressure on interest rates.

What are we waiting for?

But why haven’t prices started rising already if there is so much money floating around? This year’s inflation rate is running at just 1.5 percent. There are three answers.

First, three quarters of the newly created money hasn’t made its way into the blood stream of the economy – into M1 – the money supply held by the public. Instead, the Fed is paying the banks interest not to lend out the money, but to hold it within the Fed in what are called excess reserves.

Since 2007, the Monetary Base – the amount of money the Fed’s printed – has risen by $2.7 trillion and excess reserves have risen by $2.1 trillion. Normally excess reserves would be close to zero. Hence, the banks are sitting on $2.1 trillion they can lend to the private sector at a moment’s notice. I.e., we’re looking at a gi-normous reservoir filling up with trillions of dollars whose dam can break at any time. Once interest rates rise, these excess reserves will be lent out.

The fed says they can keep the excess reserves from getting lose by paying higher interest on reserves. But this entails poring yet more money into the reservoir. And if interest rates go sufficiently high, the Fed will call this practice quits.

As excess reserves are released to the economic wild, we’ll see M1, which was $1.4 trillion in 2007, rise from its current value of $2.6 trillion to $5.7 trillion. Since prices, other things being equal, are supposed to be proportional to M1, having M1 rise by 219 percent means that prices will rise by 219 percent.

But, and this is point two, other things aren’t equal. As interest rates and prices take off, money will become a hot potato. I.e., its velocity will rise. Having money move more rapidly through the economy – having faster money – is like having more money. Today, money has the slows; its velocity – the ratio GDP to M1 — is 6.6. Everybody’s happy to hold it because they aren’t losing much or any interest. But back in 2007, M1 was a warm potato with a velocity of 10.4.

If banks fully lend out their reserves and the velocity of money returns to 10.4, we’ll have enough M1, measured in effective units (adjusted for speed of circulation), to support a nominal GDP that’s 3.5 times larger than is now the case. I.e., we’ll have the wherewithal for almost a quadrupling of prices. But were prices to start moving rapidly higher, M1 would switch from being a warm to a hot potato. I.e., velocity would rise above 10.4, leading to yet faster money and higher inflation.

No easy exit

I hope you’re getting the point. Having addicted Congress and the Administration to the printing press, there is no easy exit strategy. Continuing on the current QE path spells even great risk of hyperinflation. But calling it quits requires much higher taxes, much lower spending, or much more net borrowing (with requisite future repayment) from the public. Yet weaning Uncle Sam from the printing press now is critical before his real need for a fix – paying for the Baby Boomers’ retirement benefits – kicks in.

The one caveat to this doom and gloom scenario is point three – increased domestic and global demand for dollars. The Great Recession put the fear of God into savers worldwide. And the fact that U.S. price level has risen since 2007 by only 15 percent whereas M1 has risen by 88 percent reflects a massive expansion of domestic and foreign demand for “safe” dollars. This is evidenced by the velocity of money falling from 10.4 to 6.6. People are now much more eager to hold and hold onto dollars than they were six years ago.

If this increased demand for dollars persists, let alone grows, inflation may remain low for quite a while. But our ability to get Americans and foreigners to hand over real goods and services in exchange for very few green pieces of paper is hardly guaranteed once everyone starts to understand the incredible rate at which Uncle Sam is printing and spending this paper. Once everyone gets it into their heads that prices are taking off, individual beliefs will become collective reality. This brings me to my bottom line: The more money the Fed prints, the more it risks everyone starting to expect and, consequently produce, hyperinflation.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cGFUFBNh9ss/story01.htm Tyler Durden