Tag: finance

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We used to say that money made the world go round. But, that was a whole invention from the start of things just to make it look good and to make the world believe that we would not be able to revolve on our axis had the concept of monetary exchange not been thought up. Today it’s time to get to the real truth behind what money actually does. It doesn’t make the world go round any more than anything else. It’s just a motor for power and it creates nothing more than a divide between those that have it and those that don’t.

We have two sides. Those that are on the winning team have the money and they have the power to change the goalposts, to play the field and win that game and they will be left standing at the end alone on the podium. Those that are on the losing team (and that means that they were always destined to lose) have little or no power despite the fact that they have immeasurable numbers waiting on the touchline, sitting on the bench waiting to take part and kick the ball around.

Money means power. Money only deprives people on the losing team of their fundamental rights in society and it’s money that makes the world go round.

Money is power and power is money and it’s a two-way relationship these days even more so than ever before.

Money Deprives Us of Fundamental Rights

Whether it’s in Russia, China or in the USA, people that have the power are a handful of the few that are wallowing in the money. They bathe in gold and it’s not anything to do with spreading that money around and having the Midas touch. The powerful rich are the few that exploit, condemn, decide and amass whatever they might be able to get their hands on.

Money still does one thing that we used to say. It attracts more money. Not having money does nothing more than maintaining people that are poor in slavery of the masses and what’s surprising is that it’s money that is the object of all desire in society still today.

People (or most) are out there to amass as much as they can get, because they have been shown by example that getting rich means striking the reserve of power. The game is so unequal that just the sheer numbers of the masses of poorer people should be able to get their hands on what they want. But, for that, it would take a revolution and even then it wouldn’t change much. We replace monarchs with oligarchs and we chop off heads (of state) just to replace them with other wealthy people that take over the power and for a time allow the poor masses to believe that they are living in a democratic environment.

UK

The British did it when they ordered their Divine King to get down on his knees and pledge allegiance to the Parliament, chopping off his head to transform their country into a constitutional monarchy, with a handful of the elite taking the power today in the country. David Cameron, the British Prime Minister descends from William IV and he was formatted at the most elite school in the UK, Eton College, the hotbed of aristocracy and bourgeoisie.

• At the UK General Election in 2010 which brought Cameron to power after the hung parliament, 6% of the Conservative Members of Parliament went to the same school as Cameron (costing $46, 491 per year).
• That means that thanks to Cameron the number of Eton-educated elite in the UK Parliament has risen from 14 to 20 people.
• Since when was that representative of the rest of the UK?
• 34% of current UK MPs went to private school.
• The national average stands at just 7%.
• 54% of Conservatives were privately educated in the country’s top schools.
• 41% of the Lib Dems were privately educated also.
• 24% of all MPs went to Oxford University or Cambridge University.
• That figure stands at 32% for the Conservative Party alone.
• 27% of Conservatives have worked in the financial sector.

France

The French took their Bastille and marched en masse on the Palace of Versailles to chase after the fleeing monarch and his ‘Austrian woman’ (as she was known) to simply have today a set-up in which the elite buddy-system was there to play out a fantastic public show of Republicanism and democracy.

Democracy is the ‘power of the people’, but they forget to say that they defined ‘people’ in other ways. The plebs don’t have power. Today, just like all French politicians, you have to go to Sciences-Po to become a leader. But, even that is not enough to filter out the plebs. You have to study at the vanguard of bureaucracy, the elitistly revered École Nationale d’Administration.

There are few countries in the world where going to school determines so very much your career prospects. Want to get to the top?

• Then, go to the schools like the ENA that cost the state 11 times more than going to any other school in the country.
• The ENA costs 83, 000 euros ($112, 000) per year per student.
• Yes, the democracy of France turns elitism into a byword for freedom and power.
• Get into the ENA and the state will pay for your schooling so that you can become the elite of the elite, the crème de la crème, lapping up the salary that will be paid to you (yes they pay students there) for you to study in the hallowed walls of the school.

USA

Education was meant to be the great ‘equalizer’. But, which university wants a poor kid? They cost too much. Rich kids go to rich schools and it’s the rich kids that grow up to become rich(er) adults. You can be as high-achieving as you want, but if you have the poor label on your back, you aren’t going to get into the Ivy League or any league for that matter.

• As from 2011, US admissions directors increased their efforts to get ‘full-pay’ students enrolling at their establishments by 35%.
• 70% of colleges today in the US need to increase their revenue and believe that this is the way to do so quickly and easily.
• States are spending out 28% less than in 2008 to finance tuition per student in colleges these days.
• The money has got to come from somewhere.
• Depriving the plebs of education means that that they will be deprived of a fundamental right: access to knowledge.
• They will therefore be deprived of the ‘power of the people’.
• The wealthy won’t.

The Ivy League is a training ground for power and money. The system has taken on dysfunctional proportions and the politicians are today ‘untrusted’ due to their privileges and ‘discredited’ because of their associations and ties with the banksters.

Today there is a growing feeling that shellacking will happen one of these days and the politicians will have to give up their place or have it taken from them. It’s either that or have them lunched, by turning them into lunchmeat.

Alternative

Let’s stop condemning the caste system that drove a wedge between people in a country like India. Let’s start condemning the people that maintain the underlings in inferior positions so that those at the top can amass the wealth, the money and the rights that go with it. Elite-bashing? Maybe, but it’s certainly time things were turned around. Our leaders and the wealthy were never trained to succeed in the world; they were only trained to succeed in the corridors of power in the respective capitals from where they dish out their orders.

That’s why their success in the global economy has constantly failed.

T
here’s a growing number of people that espouse the random selection of politicians from the public. Yes, this is no joke. Everybody would get a chance to be elected and randomly chosen from the public to get a revolving seat in Congress. Lottery-style selection would be the viable alternative of taking privilege away from the elite and putting the power back in the hands of the people.

Lottocracy would be much better than democracy, which really never existed in anything more than text-book myth. The people that would be selected would not be vying to get to the top, they would be chosen randomly and that means that their decisions would probably tend to be much more responsive to the expectations of the people. It would mean that lusting after power and the distortion of interest would be a thing of the past. Political power has been allowed to accumulate in the hands of an elite few. It’s our turn to rule and they need to get a taste of what it actually means to be ruled by someone else.

Those who wish to govern in today’s politics are the least suited to do so it might seem.

How is there a hope of giving the power to the people when the people that have the power are the elite of the nation because they have the money to maintain that position? How is there a hope that money will be more equally shared around when the majority of people that govern countries have worked in or are intrinsically linked to the financial world? There’s little wonder that the world’s banking system is hardly going to be about to change, just a little and even far less in radical terms, when the people that rule the countries are financiers themselves. Why did we ever let them take the power in the first place and why do we condone the position of elitist leaders by complacently accepting what they say and do?

Climbing the greasy pole that politics has become is nothing to do with who you are and what you say. It has everything to do with where you come from and what you have in the bank account to back you up.

 

Originally posted: The Super Rich Deprive Us of Fundamental Rights

 

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Technical Analy
sis: Bear Expanding Triangle | Bull Expanding Triangle | Bull Falling Wedge | Bear Rising Wedge | High & Tight Flag

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IDOd98pc4pU/story01.htm Pivotfarm

In 1997, the SE Asian Tigers all faced severe economic stresses, partially triggered by a primarily foreign capital-funded massive real estate bubble in Thailand. Today the EXACT same thing is happening as untempered foreign investment into Thailand’s real estate market has created not a “soaring” real estate market as economists always incorrectly explain them, but massive real estate market distortions better known as a bubble. And just as the world learned nothing from huge stock market crashes in 2008 as Central Banks have used the exact same tactics from back then to duplicate the re-inflation of massive US and European stock market bubbles today, it seems Asia is having a massive problem learning from the tragedy of 1997 as well. Back then, banking and economic shills explained the massive withdrawal of foreign capital that triggered the onset of the 1997 Asian financial crisis as “unforeseeable”, again a bunch of academic rubbish to anyone that understands how bankers engineer low-interest Central Bank policies to specifically transfer wealth from the millions of customers to the few that are part of the criminal banking class through their bait and switch tactics in capital markets.

 

 

The deliberate banking creation and existence of such a scenario in Thailand’s real estate markets today is painfully obvious to anyone that has ever studied the 1997 Asian financial crisis, yet it is the “elephant in the room” that no one is willingly to openly discuss in Asia at this time. Furthermore, it is obvious from the enormous $500 million+ windfalls kept by Wall Street CEOs of collapsed firms Merrill Lynch and Lehman Brothers in 2008, that those that create such massive asset price distortions (the banking class) are the ones that benefit most from its creation and are best informed via inside information to avoid the collapse. Consequently, when massively pumped-up and distorted asset prices collapse, it is of no consequence to the bankers that created them (other than in magnitude of profits) as they always front-run markets, exit them well before their own personal accounts would be destroyed, and short these markets on the way down based upon their inside information. Crises, in fact, are wonderful opportunities for the banking class to transfer wealth from the have-nots to themselves, as has continued to happen since 2008. In fact, international bankers will always view every asset collapse and consequent crisis as a massive opportunity to control a nation’s debt and kill the ongoing viability of local businesses at the expense of their own “crisis profiteering”. Thus given that we have even larger capital bubbles now than we did in 2008, bankers are salivating over the wealth transfer prospects now at hand. The IMF’s plan to control the debt of the SE Asian countries after the 1997 crisis was on display for all to see when they swooped in with their “bailouts”, which were nothing more than thinly veiled contracts with all kinds of restrictive conditions and impositions on the debt that hurt the working class of the nations they “bailed out” while it simultaneously opened up previously closed markets to rapacious multi-national corporations eager to gain a foothold in newly and rapidly growing emerging markets.

 

 

As I stated above, one of the key conditions, if not THE key condition, of the 1997 Asian financial crisis was the unchecked massive foreign capital inflows into the SE Asian Tigers in the 1990s that created easy liquidity responsible for the massive distortions of real estate market prices. In fact many Thai real estate developers borrowed capital in the form of unhedged USD-denominated loans during that time, lured by the cheap cost of borrowing US dollars. Today, I hear the same thing that was stated pre-1997 crisis all the time from financial advisers in Thailand: “there can be no crisis because there currently is so much easy liquidity!” That is not only a foolish, but an ignorant statement. Why do you think Thailand has so much liquidity in 2013? And why do you think Hong Kong and Chinese real estate markets are currently experiencing similar bubble properties today that manifest themselves in hyperinflated properties, such as the Shanghai housing market, a market that rose 12% higher (to 26,527 yuan/square meter) during the past month of October alone? Could the answer have anything to do with the fact that the Bank of England, the ECB, the Bank of Japan and the US Federal Reserve have all created trillions upon trillions upon trillions of dollars, euros, yen and pounds out of thin air, all available at dirt-cheap interest rates, and jammed it into the global financial system to keep the global Ponzi banking system alive?

 

What happens if that liquidity suddenly disappears again as it did in 1997?

What conditions could possibly create a rapid evaporation of the current easy liquidity?

What safeguards has the government taken to guard against a rapid exit of liquidity and are these safeguards adequate?

 

The above questions are all ones that need to be adequately studied and answered, and that’s what we will do within the scope of this article.

 

During 1990-1996, in the period that immediately preceded the SE Asian economic meltdown, capital inflows in Thailand increased more than seven fold from just 5 years prior to a stunning 10.3% of GDP. The vast majority, or 7.6% of the 10.3% of capital inflows, resulted from offshore borrowing by banks and private corporations, making the 1997 crisis primarily one instigated by a combination of greed for rapid profits and terribly lax banking regulations. The remaining capital inflows outside of offshore loans consisted of portfolio capital inflows (1.6% of GDP) and foreign direct investment (1.1% of GDP). In any event, since a sudden stoppage of foreign capital inflows into Thailand triggered the 1997 crisis, we must ask ourselves what could possibly trigger the same event in today’s financial environment? Since massive currency devaluation (otherwise dressed up in flowery terms by bankers as “quantitative easing”) undertaken by every Western Central Bank in the world has been responsible for huge capital inflows into Thailand at the current time, and most people that truly understand the dilemma of Western Central Banks (i.e. not academic-trained economists like Paul Krugman) understand that the West cannot turn off these broken faucets of monetary leakage for fear of collapsing their bond markets, most believe that Thailand is at no risk for a repeat of 1997. But is this assessment accurate?

 

To get the bottom of this question, we must first investigate what happened in and around 1990 that caused such a drastic shift in capital inflows as a percent of GDP in Thailand? To begin, the already stated relaxation of financial regulations in 1991 drastically altered the behavior of capital inflows to Thailand from 1987-1991 bank-sourced capital inflows that averaged 6.5% of all capital inflow to a whopping 50.4% of all capital inflows during the 5 years after deregulations. The reason offshore bank loans as a source of financing in Thailand soared after deregulation was simple economics. US prime rates and LIBOR rates were typically multiples lower than Thai bank interest rates. If you look at the chart below, you can see that this problem of cheap offshore financing has persisted in recent years, and as it did during the build-up to the 1997 crisis, low offshore interest rates are once again contributing to the same massive, bubbly capital inflows that caused the Thai real estate crash in 1997.

 

 

As was the case in 1996, when the IMF predicted Thailand’s economy would recover in 1997, we are seeing the same pattern of errors by the IMF again in SE Asia (or perhaps just deliberate misdirection), as the IMF has just predicted Thailand’s growth to remain steady from 2012 at 7.8% in 2013 and just about the same at 7.7% in 2014 (Source: World Economic Outlook, 9 July 2013). Deloitte Research, Deloitte Services LP, is right on board with the IMF in predicting stability in economic growth despite huge capital bubbles in Thailand, stating in their 2013 outlook for Thailand: “Economic stability is not a concern, at least in the short term, and growth is likely to be self-sustaining,” though Deloitte was at least insightful enough to qualify their statement with “at least in the short-term”. (Source: Asia Pacific Economic Outlook, May 2013)

 

However, I believe that by H2 of 2014, if not earlier, the Thai Real Estate market will begin to show some real serious stresses from all the wasteful destructiveness of Western Central Banking monetary policy. During the first four months of 2013, total investment value in Thailand amounted to 510 billion baht, a whopping bubble-like increase of 80% yoy (Source: Thailand Board of Investment). By May, 2013, capital inflows into Thailand had reached USD$5.86 trillion (Bt176.37 trillion), triple the USD$1.85 trillion (Bt55.648 trillion) of inflows during the 2007-2008 US economic crisis (at the current exchange rates).

 

Since 2012 Q3, capital inflows have averaged US$4 billion (Bt120.32 billion), double the US$2 billion (Bt60.16 billion) average of the last five years. Thus, as I’ve discussed above, the enormous capital inflows into Thailand in recent years have caused bubble prices in the RE market and dwarf the capital inflows into Thailand that preceded the 1997 crisis. Thus, a sudden stoppage of inflows would have devastating effects on the Thai economy. So since Western (and Japanese) banking institutions are doing nothing to stop the capital inflows into Thailand with their near zero interest rate policies, lets see what the Thai government has done to prevent these enormous inflows from suddenly reversing direction as it did in 1997, causing the Thai baht to plunge to a record 50 baht per dollar (continued)…

 

To finish reading this white paper, please visit our website at https://www.smartknowledgeu.com and subscribe to our free newsletter. You will receive the link on how to download the full white paper “SmartKnowledgeU White Paper Series, 1 – The Biggest Disaster in SE Asia Waiting to Happen: Thailand’s Massive Real Estate Bubble” in your confirmation message after subscribing. This white paper may NOT be published, or re-printed on any other website or publication. Only the first paragraph of this article may be re-printed with a link back to this site.

 

 

About the author:  JS Kim is the Managing Director of SmartKnowledgeU, a fiercely independent investment consulting & research firm that investigates the excesses of Wall Street to protect the wealth of Main Street and seeks to uncover the best ways to invest in gold and silver.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7qg5i18y1WU/story01.htm smartknowledgeu

On Friday October 5, 2012, the BLS released what was arguably the most important report of Obama’s first term: the final jobs number, and unemployment rate before the November 2012 presidential election. As so many predicted, it “plunged” from 8.1% to 7.8% allowing the president to conduct countless teleprompted speeches praising the success of his economic recovery. It also served as the basis for the infamous Jack Welch tweet: “Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers” and prompted the pro-Obama media to quickly brand all those who questioned it as conspiracy theorists. The Atlantic did perhaps the most exemplary job in its task to discredit the “random anonymous cranks” who challenged the bullshit spewed by the administration’s manipulative economic data reporting apparatus. From The Atlantic’s Unemployment Plummets To 7.8%.

The unemployment rate plunged to 7.8 percent in September, its lowest level since Barack Obama took office in 2009. In addition, the Bureau of Labor Statistics made big revisions to data from previous months, showing huge increases in the number of jobs being created over the last three months. Total employment from the “household survey” also showed an increase of 873,000 jobs last month, the biggest one-month jump since June of 1983.

 

Not only has the unemployment rate gone down, but the report also undercut one of the key criticisms of previous drops in the number—that it was because the “participation rate” went down. That rate has actually gone back up, which means unemployment is down because people are actually getting work, not because they’ve stopped looking. Public sector jobs also went up, as did the average number of hours worked per week.

 

This report looks so good for President Obama that conspiracy theorists are already alleging that the fix is in. And not just random anonymous cranks, but supposedly serious business people, like former General Electric CEO Jack Welch.

 

Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers

— Jack Welch (@jack_welch) October 5, 2012

 

He wasn’t alone:

 

No, there’s nothing at all curious about the last jobs report diving to 7.8% unemployment before the election.

— Keith Urbahn (@keithurbahn) October 5, 2012

Total data manipulation. Such a farce

— zerohedge (@zerohedge) October 5, 2012

 

Rick Santelli of CNBC, noting that the rate has dropped below the magical number of 8 percent, said,  “You can let America decide how they got there.” When one side is convinced that something smells rotten, you know it’s good news for the other guy.

 

As we noted his comment at the time…

 

“the current trend of these [jobs] numbers is so different from the current trend of any other numbers. If you were looking for conspiracies (and I’m not), you only need to change a certain number.“

 

 

Of course, who cares if the “conspiracy theories” were substantiated by actual data. Such as the following:

Or this:

Reason For Today’s Unemployment Rate Plunge: Part-Time Jobs For Economic Reasons Surge Most Since QE1 Announcement

 

We already noted the absolutely stunning surge in reported Household Survey jobs which “added” 873,000 jobs, or the most since 2003 and the second most in the past decade, which was just a little bit off the Household Survey used in the monthly NFP jobs changes, which came at 114,000, or about 8 times less. But what was the reason for this epic jump in Household survey jobs? Simple, and those who have read our series on America’s transition to a part-time worker society know the answer. The reason is that the number of part-time people employed for economic reasons soared by 582,000 to 8,613,000, the most since October 2011, and the largest one month jump since February 2009, when “restoring” confidence in the economy was all the rage… and just before the Fed announced the full blown QE1 in March of 2009. Odd symmetry.

 

 

So
putting it all together, what does this mean for the true state of the US economy? Recall back in September one of our Charts of the Day was the number of Unemployed and Underemployed for the month of August, which was 25.8 million. Readers may be surprised to learn that when putting it all together, in September this number increased to 26.2 million.

 

Or this:

The Strangest Number In Today’s Jobs Number

 

While we already presented the explanation for the dramatic drop in today’s unemployment report (almost entirely driven by the surge in part-time jobs for economic reasons, hardly a thing to be proud of as more and more full time jobs, especially those on Wall Street, are a thing of the past, while the transition to a part-time worker society has been documented extensively in the past here), there is another number that is by far the most perplexing in today’s NFP dataset: that showing the employment of workers in the 20-24 year age category (both seasonally adjusted and unadjusted). See if you can spot the outlier in the chart below.

 

 

And many more other such reports posted on this site on the same day, alleging fabrication which as it turns out courtesy of the just released stunning disclosure by the Post, were absolutely spot on since the number was, you guessed it, manipulated.

The Post’s John Crudele reveals the details on a data manipulation scandal, which we exposed back in October 2012, but this time with the actual “dirty details” that has the potential to be so big, Obama will need to start another YouTube-fabricated, false flag war just to distract from this latest scandal.

From The Post’s “Census ‘faked’ 2012 election jobs report“

In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.

 

The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated.

 

And the Census Bureau, which does the unemployment survey, knew it.

 

Just two years before the presidential election, the Census Bureau had caught an employee fabricating data that went into the unemployment report, which is one of the most closely watched measures of the economy.

 

And a knowledgeable source says the deception went beyond that one employee — that it escalated at the time President Obama was seeking reelection in 2012 and continues today.

 

“He’s not the only one,” said the source, who asked to remain anonymous for now but is willing to talk with the Labor Department and Congress if asked.

 

The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census.

 

Ironically, it was Labor’s demanding standards that left the door open to manipulation.

 

Labor requires Census to achieve a 90 percent success rate on its interviews — meaning it needed to reach 9 out of 10 households targeted and report back on their jobs status.

 

Census currently has six regions from which surveys are conducted. The New York and Philadelphia regions, I’m told, had been coming up short of the 90 percent.

 

Philadelphia filled the gap with fake interviews.

 

“It was a phone conversation — I forget the exact words — but it was, ‘Go ahead and fabricate it’ to make it what it was,” Buckmon told me.

 

Census, under contract from the Labor Department, conducts the household survey used to tabulate the unemployment rate.

 

Interviews with some 60,000 household go into each month’s jobless number, which currently stands at 7.3 percent. Since this is considered a scientific poll, each one of the households interviewed represents 5,000 homes in the US.

 

Buckmon, it turns out, was a very ambitious employee. He conducted three times as many household interviews as his peers, my source said.

 

By making up survey results — and, essentially, creating people out of thin air and giving them jobs — Buckmon’s actions could have lowered the jobless rate.

 

Buckmon said he filled out surveys for people he couldn’t reach by phone or who didn’t answer their doors.

 

But, Buckmon says, he was never told how to answer the questions about whether these nonexistent people were employed or not, looking for work, or have given up.

 

But people who know how the survey works say that simply by creating people and filling out surveys in their name would boost the number of folks reported as employed.

 

Census never publicly disclosed the falsification. Nor did it inform Labor that its data was tainted.

 

“Yes, absolutely they should have told us,” said a Labor spokesman. “It would be normal procedure to notify us if there is a problem with data collection.”

 

* * *

 

During the 2010 Census report — an enormous and costly survey of the entire country that goes on for a full year — I suspected (and wrote in a number of columns) that Census was inexplicably hiring and firing temporary workers.

 

I suspected that this turnover of employees was being done purposely to boost the number of new jobs being report each month. (The Labor Department does not use the Census Bureau for its other monthly survey of new jobs — commonly referred to as the Establishment Survey.)

 

Last week I offered to give all the information I have, including names, dates and charges to Labor’s inspector general.

 

I’m waiting to hear back from Labor.

 

I hope the next stop will be Congress, since manipulation of data like this no
t only gives voters the wrong impression of the economy but also leads lawmakers, the Federal Reserve and companies to make uninformed decisions.

Don’t hold your breath: the reason is that this particular instance manipulation is merely the tip of the iceberg – since virtually all data out of the BLS is manipulated and fabricated, as we report each and every month, the last thing the legislative and certainly the executive want is to offer the general public a glimpse of just how deep the rabbit hole goes. Because it goes very, very deep.

One can only hope this forces at least some more people to wake up about the sad farce this once great nation has devolved to in its quest to destroy the middle class.

The only real good news, as noted above, is that yet another conspiracy theory is forever cast into the void, and going forward the only thing the random, but manipulated, number generator out of the Bureau Of Lies And Subterfuge will be good for, is to prod the just as pathetic HFT algos into a buying frenzy when month after month the economy is painted with rosy brushes, even as millions forever drop out of the labor force, never to return.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tamzdCAei3g/story01.htm Tyler Durden

As written by Carl Icahn on the Shareholders’ Square Table

Personal Views Concerning Media Reports On My Remarks re Markets and APPL from Reuters Summit

Reuters was completely accurate that I am concerned about the level of the market.  But I also made it clear on the conference call (and I believe as Reuters reported it), that it is almost impossible to predict what a market will do in the short term.  There are too many variables.

Often when we are concerned about the market, we hedge to some extent and this is one of those times.  Interestingly, our investment funds had an annualized return of approximately 27% since January 1, 2009, and that return would have been greater if we had not hedged.  As I have often said, picking short term moves in the market is like predicting how many sevens the “hot” dice player will continue to roll.

Concerning Apple, I told Reuters I believe that Apple is not a bank and that a large buyback should be put into place, as well as taking advantage of other ways this cash can be made more productive.  While I do not micromanage, at the risk of being immodest, I believe that in the area of allocating capital there are very few better then we and we hope to be able to be involved, as a large shareholder, with Apple, in this area.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GTB_Ceau6a0/story01.htm Tyler Durden

As written by Carl Icahn on the Shareholders’ Square Table

Personal Views Concerning Media Reports On My Remarks re Markets and APPL from Reuters Summit

Reuters was completely accurate that I am concerned about the level of the market.  But I also made it clear on the conference call (and I believe as Reuters reported it), that it is almost impossible to predict what a market will do in the short term.  There are too many variables.

Often when we are concerned about the market, we hedge to some extent and this is one of those times.  Interestingly, our investment funds had an annualized return of approximately 27% since January 1, 2009, and that return would have been greater if we had not hedged.  As I have often said, picking short term moves in the market is like predicting how many sevens the “hot” dice player will continue to roll.

Concerning Apple, I told Reuters I believe that Apple is not a bank and that a large buyback should be put into place, as well as taking advantage of other ways this cash can be made more productive.  While I do not micromanage, at the risk of being immodest, I believe that in the area of allocating capital there are very few better then we and we hope to be able to be involved, as a large shareholder, with Apple, in this area.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/GTB_Ceau6a0/story01.htm Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

If there were any shreds of hope left that the stunning decline of the middle class could be turned around, Obamacare has absolutely destroyed them.  Over the past decade or so, the middle class in the United States has been absolutely eviscerated.  The number of working age Americans without a job has increased by 27 million since the year 2000, median household income in the U.S. has fallen for five years in a row, and the poverty numbers in this country are spiraling out of control.  And now here comes Obamacare.  As you will see below, Obamacare is causing millions of Americans to lose their current health insurance policies, it is causing health insurance premiums to explode to absolutely ridiculous levels, and it is systematically killing jobs even though the employer mandate has been delayed for a while.

All of this is creating a tremendous amount of stress for millions of middle class families that are already stretched extremely thin financially.  According to CNN, a survey that was conducted earlier this year found that 76 percent of all Americans are living paycheck to paycheck.  Most of those families simply cannot afford to pay much higher health insurance premiums for new policies that also come with much larger deductibles and significantly increased out-of-pocket costs.  Millions of those families will ultimately end up choosing to do without health insurance altogether, and that will create a whole host of new problems.  This is a disaster that is so enormous that it is really hard to put into words.  If the U.S. health care system was a separate country, it would be the 6th largest economy on the entire globe all by itself.  And now Obamacare is going to bring the entire U.S. health care system to its knees.

Obamacare: Since October 1st, The Number Of Americans With Health Insurance Has Fallen By Nearly 4 Million

Last week, Barack Obama decided to allow Americans to keep their current health insurance plans for one more year.

Isn't that generous of him?  Especially considering the fact that he promised us over and over that if we liked our current health insurance policies that we would be able to keep them permanently.

The funny thing is that Obama is not actually changing the law.  So if your health insurance company allows you to stay on your current health insurance plan that does not meet the requirements of Obamacare, it is technically breaking the law.

And if you continue to stay on that current health insurance plan that does not meet the requirements of Obamacare, you are technically breaking the law.

It is just that Obama has promised not to enforce what the law says for one year.

For a president to just blatantly disregard the rule of law is a very dangerous precedent.  Do we really want the president to have the power to decide what laws are going to be enforced and what laws are not going to be enforced?

That sounds dangerously close to a dictatorship to me.

And in any event, there are many Americans that are not going to be able to keep their current policies no matter what Obama says.  For example, just two hours after Obama announced his plan last week, the state of Washington announced that they would not be allowing insurance companies to extend their old health insurance plans if they don't comply with Obamacare under any circumstances…

State Insurance Commissioner Mike Kreidler has rejected President Obama’s proposal to allow insurance companies to extend health insurance policies for people who have received notices that their policies will be cancelled at the end of the year.

 

Within two hours of President Obama’s news conference announcing the proposed administrative fix for Americans upset by their policy cancellations, Kreidler issued a statement rejecting the proposal.

 

“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits [in the Affordable Care Act] today,” he said. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.”

 

“I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.”

How do you think the people of the state of Washington will respond to that?

Things are getting crazy out there, and the number of people that are losing their health insurance policies is absolutely stunning.

According to the Wall Street Journal, so far 106,185 Americans have enrolled in Obamacare since October 1st.  Most of those that have successfully enrolled have done so through the state insurance exchanges.  So far, only 26,794 Americans have signed up for health insurance using the federally run exchanges on HealthCare.gov.

Meanwhile, during that same time frame, 4.02 million Americans have had their health insurance policies cancelled.

So that means that the number of Americans with health insurance has actually decreased by 3,918,205 since October 1st.

Wasn't Obamacare supposed to result in more Americans being covered?

And according to U.S. Senator Rand Paul, Obama not only knew that this would happen, he actually wrote the regulation that caused this to happen…

"I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation WRITTEN BY PRESIDENT OBAMA, three months later. So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you COULDN’T BE CANCELLED, to grandfather e
verybody in. You know what the vote was? Straight party line. EVERY DEMOCRAT VOTED TO KEEP THE RULE THAT CANCELS YOUR INSURANCE."

So now millions of Americans, including women battling cancer, are losing health insurance plans that they were depending upon.

Thanks Obama?

Obamacare: Skyrocketing Health Insurance Premiums

How much more are you willing to pay for health insurance than you are paying right now?

10 percent?

20 percent?

30 percent?

Well, according to one study health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare.

And of course some groups are going to see increases that are much larger than that.  For example, it is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent.

Ouch.

And there are some families out there that have already been hit with health insurance premium increases that are absolutely jaw-dropping.  In a previous article, I included the example of one family down in Texas that has been hit with a 539% rate increase…

Obamacare is named the "Affordable Care Act," after all, and the President promised the rates would be "as low as a phone bill." But I just received a confirmed letter from a friend in Texas showing a 539% rate increase on an existing policy that's been in good standing for years.

 

As the letter reveals (see below), the cost for this couple's policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K — a middle-class family, in other words.

Obamacare: Enormous Deductibles And Huge Out-Of-Pocket Expenses For All

It isn't just health insurance premiums that are going up either.  Deductibles are going up too.  In fact, just check out what one survey of Americans living in seven different states recently discovered…

Expenses for some policies can reach $6,350 for a single person and $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket.

That same article has a great quote from an elderly New Jersey resident.  82-year-old Larry Saphire thinks that if you have to pay a $5,000 deductible up front, "you might as well not have any insurance at all"…

“If you have to pay $5,000 upfront” when illness hits, “you might as well not have any insurance at all,” said Larry Saphire, 82, of West Orange, New Jersey, who shopped for coverage for his wife and two children, ages 16 and 21. “That’s not insurance.”

 

On California’s state-run exchange site, the standard low-premium “bronze” plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800 deductible while Missouri’s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.

Obamacare: The Quality Of Care Is Going To Go Into The Toilet

A lot of Americans that are signing up for Obamacare are going to be in for a huge shock.  Many of the best hospitals and many of the best doctors are not covered by their plans…

Meanwhile, sometime between March and June, the other shoe drops: People who bought exchange policies realize that the restricted networks insurers created to keep the premium costs low cut out the best hospitals and doctors. A newly insured child with cancer cannot get into a top pediatric hospital because her insurance has zero coverage for out-of-network emergency care. Tearful Mom goes on the evening news and says that she thought when they went on Obamacare, that meant they were safe, and why can’t I take my baby to Philadelphia Children’s Hospital, Mr. President?

Can you imagine being a parent in that situation?

In response, some hospitals are already filing suit over this.  For instance, check out what is happening over in Seattle…

Seattle Children’s Hospital filed suit against Washington State’s Office of the Insurance Commissioner this week, after Obamacare implementation caused the hospital to be cut from four of the six insurance plans offered by the new Washington Health Benefit Exchange.

And even if you are on Medicare that does not mean that the quality of your care is going to stay the same either.  As Reuters just reported, UnitedHealth is dumping "thousands of doctors" from their Medicare Advantage plans for the elderly because of Obamacare…

UnitedHealth Group dropped thousands of doctors from its networks in recent weeks, leaving many elderly patients unsure whether they need to switch plans to continue seeing their doctors, the Wall Street Journal reported on Friday.

 

The insurer said in October that underfunding of Medicare Advantage plans for the elderly could not be fully offset by the company's other healthcare business. The company also reported spending
more healthcare premiums on medical claims in the third quarter, due mainly to government cuts to payments for Medicare Advantage services.

In the United States, we already pay much more for health care than everyone else in the world, and we typically have to wait longer to see a doctor than most of the rest of the industrialized world does.

Now Obamacare is going to make all of this even worse, and the quality of the care that we receive is going to go downhill fast.

Obamacare: The Jobs Killer

A while back, Obama unilaterally made the decision to delay the implementation of the employer mandate until 2015.

That was probably a good political decision, because it would have been a huge political issue in the 2014 elections.

But the truth is that we won't have to wait until 2015 for Obamacare to start killing jobs.  In fact, according to CNBC it is already happening…

Approximately one-third of business decision-makers at companies with between 40 and 500 employees, say the health-care law has already increased their costs due to hikes in both the cost of insurance and compliance, according to a recent report from political-research firm Public Opinion Strategies. As a result, many business leaders say they are already making personnel decisions based on the Affordable Care Act.

 

Among franchised businesses, 27 percent report their company has replaced full-time workers with part-time workers and 31 percent have reduced worker hours. Among non-franchised businesses, 12 percent are replacing full-time workers with part-time workers or reducing hours. This is happening now, with more than a year before the mandate goes into effect; and undoubtedly, these numbers will rise as we approach next July's "look back" period for tabulating workers' hours.

It is kind of startling that we are already seeing employers make such big changes even though the employer mandate does not come into effect until 2015.  You can find a very long list of some of the employers that have already either eliminated jobs or cut hours because of Obamacare right here.

Remember, this is just the tip of the iceberg.  Once we get closer to the deadline things are going to get much, much worse.

At a time when the middle class desperately needs jobs, Obamacare is going to slaughter them.

And even if you are able to keep your current job, that does not mean that your health plan will remain the same.  In fact, Forbes is projecting that a staggering 51 percent of all employment-based health insurance plans will be canceled and replaced with new ones.

Overall, Forbes is projecting that an astounding 93 million Americans will eventually lose their current health insurance policies due to Obamacare.

Obamacare: Providing Huge Incentives For Many Americans To Work Less And Make Less Money

Did you know that Obamacare is going to cause millions of Americans to want to keep their incomes under certain levels?

If you make too much money under Obamacare, you will miss out on some absolutely massive health care subsidies.  The following is an excerpt from one of my previous articles…

—–

The figures that you are about to see were calculated using the Kaiser Family Foundation subsidy calculator.  These numbers apply to a husband and a wife that are both 62 years old.

A non-smoking, married couple living in San Francisco, California earning $63,000 a year will have to pay $20,318 a year for a silver plan under Obamacare and $12,647 a year for a bronze plan.

At $63,000, that couple would be making too much money to be eligible for a subsidy, so that couple will have to pay the total cost of whatever plan they choose by themselves.

But if that couple only made $62,000 a year, things would dramatically change.

The plans would still cost the same, but the couple would now be eligible for an Obamacare subsidy of $14,428.

So a silver plan would end up costing them only $5,890, and they would ultimately pay nothing for a bronze plan.

In other words, by reducing their income by $1,000, that couple would save $14,428 if they got a silver plan or they would save $12,647 if they got a bronze plan.

Isn’t that bizarre?

—–

In the end, millions upon millions of middle class families will decide to go without health insurance entirely for one reason or another.

This will work great until they get into an accident or become seriously ill.

As I have discussed previously, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills.  And most of those bankruptcies actually happen to people that are supposedly "covered" by health insurance.

Obamacare is going to make all of this so much worse.  Millions of middle class families will end up with no health insurance at all, and because so many of them are living paycheck to paycheck a single health emergency will be enough to send them hurtling down the path to financial oblivion.

If you get into an accident, a visit to the emergency room and a single night in the hospital can easily cost tens of thousands of dollars in many areas of the country.

If you get a serious illness such as cancer, the medical bills can be absolutely astronomical.  For instance, there are many cancer patients that rack up medical bills well in excess of a million dollars by the time that they die.

Something desperately needs to be done about our horrible health care system.  Unfortunately, Obamacare is going to make just about everything that is bad about our current system much, much worse.

And the American people are becoming increasingly disgusted and frustrated with Obamacare.  According to Real Clear Politics, an average of recent opinion polls shows that the American people are opposed to Obamacare by an average margin of 14.2 percentage points.

So what do you think about Obamacare?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/U3wcSM1HSgo/story01.htm Tyler Durden

Update: following the 30% drop to under $600 in seconds, BTC promptly rebounded to $800 in a few more seconds, as the entire BTC market is now just an algo arena.

 

* * *

Putting to rest fears that today’s Senatorial hearing on digital currencies would crater Bitcoin (if in the immediate term), moments ago the digital currency priced in USD on the Mt Gox exchange, rose to yet another unpredecented price, hitting $850 moments ago, or about 50% higher than where it was this morning.

But you ain’t seen nothing yet.

Because at the same time, the Renminbi-denominated price of Bitcoin on BTC China, has the digital currency at 6780CNY. At a USDCNY exchange rate of 6.09, this means a price over $1100 per Bitcoin.

And as the two day chart shows, somehow while Bitcoin rose 50% in 2 days, it has doubled on the Chinese exchange.

Naturally, at this point we would suggest picking up the 20%+ free arb, however it is unclear how one can short the CNY priced leg of the transaction, or if for that matter, there is even an actual, liquid market in the currency.

And as if to prove BTC just head us, as the final chart shows, taken literally moments before we were going to post this article, BitCoin touched $900 on Mt Gox… and promptly tanked to just under $600, entering a bear market in the span of seconds on what appears to be about 10,000 trades.

And a better chart of the tumble which sent BTC lower by 33% from $900 to $600 in seconds:

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

Two-and-a-half years ago, none other than the Fed’s Bill Dudley explained why the inflating price of food was nothing to worry about because iPads were dropping in price (to which an audience member, rightly, exclaimed – “I can’t eat an iPad”). Fast forward to today, and it seems, based on the highly scientific chart below, that the growth of food stamps (the benefit provided to members of our society that need caramel macchiatos or liquor – oh and food) correlates uncomfortably closely with the demand for iPads. Perhaps, Bill Dudley was right after all – we can eat our iPads…

 

 

(h/t @Not_Jim_Cramer)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/hDrMQGt1Erk/story01.htm Tyler Durden

As we warned two months ago, the bubble in credit markets (which if you ask anyone at the Fed, except Jeremy Stein, does not exist) is nowhere more evident than in the explosive growth of so-called cov-lite loans. While total volumes of cov-lite loans are already at record, as the FT reports, we now have 55% of new leveraged loans come in “cov-lite” form, far eclipsing the 29% reached at the height of the leveraged buyout boom just before the financial crisis. LBO multiples have reached record highs and demand for secutizations of these levered loans (CLOs) has surged on the back of the Fed’s repressive push of investors into more-levered firms and more-levered instruments.

 

 

 

Via The FT,

The amount of riskier loans offering fewer protections to lenders contained in packages of debt sold to investors have hit record levels, amid resurgent lending markets and a continued thirst for higher returns.

 

…

 

as “covenant-lite” loans, or loans that come with fewer protections for lenders, have this year become the norm in the US, CLO managers have been forced to relax the limits on the percentage of the loans that can go into their deals.

 

Already, 55 per cent of new leveraged loans come in “cov-lite” form, eclipsing the 29 per cent reached at the height of the leveraged buyout boom just before the financial crisis.

 

…

 

“CLO managers have clearly taken notice of this trend, and structures have come with more relaxed caps on cov-lites this year.”

 

While the majority of CLOs sold last year had a 40 per cent limit on the amount of cov-lite loans that could be bought by the vehicles, a 50 per cent cap has become the industry standard in 2013, according to data from S&P Capital IQ.

 

At least three deals have come to market this year with a 70 per cent limit.

So wondering where the leverage is building this time? Well, record high margin debt in stocks and record high exposure to the riskiest (and least protected) credit structures once again… but it’s different this time (as Moodys told us).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YutPWrqcQ40/story01.htm Tyler Durden

As we warned two months ago, the bubble in credit markets (which if you ask anyone at the Fed, except Jeremy Stein, does not exist) is nowhere more evident than in the explosive growth of so-called cov-lite loans. While total volumes of cov-lite loans are already at record, as the FT reports, we now have 55% of new leveraged loans come in “cov-lite” form, far eclipsing the 29% reached at the height of the leveraged buyout boom just before the financial crisis. LBO multiples have reached record highs and demand for secutizations of these levered loans (CLOs) has surged on the back of the Fed’s repressive push of investors into more-levered firms and more-levered instruments.

 

 

 

Via The FT,

The amount of riskier loans offering fewer protections to lenders contained in packages of debt sold to investors have hit record levels, amid resurgent lending markets and a continued thirst for higher returns.

 

…

 

as “covenant-lite” loans, or loans that come with fewer protections for lenders, have this year become the norm in the US, CLO managers have been forced to relax the limits on the percentage of the loans that can go into their deals.

 

Already, 55 per cent of new leveraged loans come in “cov-lite” form, eclipsing the 29 per cent reached at the height of the leveraged buyout boom just before the financial crisis.

 

…

 

“CLO managers have clearly taken notice of this trend, and structures have come with more relaxed caps on cov-lites this year.”

 

While the majority of CLOs sold last year had a 40 per cent limit on the amount of cov-lite loans that could be bought by the vehicles, a 50 per cent cap has become the industry standard in 2013, according to data from S&P Capital IQ.

 

At least three deals have come to market this year with a 70 per cent limit.

So wondering where the leverage is building this time? Well, record high margin debt in stocks and record high exposure to the riskiest (and least protected) credit structures once again… but it’s different this time (as Moodys told us).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YutPWrqcQ40/story01.htm Tyler Durden