Tag: finance

It would appear that the ‘gambler’s in these 5 cities were not told that the government would be shutting down, that confidence would drop, that affordability would plummet… instead they were told that nothing has changed and 29% YoY home price gains are for buying not selling..

 

Year-over-Year Home Price Gains…

 

Though it does seem that some of the ‘froth’ is starting to fade in the Detroit metropolis… (though over 16% gains).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ymZ0L-FY8Oc/story01.htm Tyler Durden

If yesterday’s collapse in September existing home sales was indicative that Housing is tumbling and it means the Fed will not taper until mid 2014 sending the S&P to a new record high, today’s August Case Shiller, which beat expectations of a M/M increase of 0.65% with a 0.93% print, and an increase of 12.82% Y/Y, probably means that the economy is very strong and will send the S&P to an even newer recorder high, since both bad and good news send only one signal to algos: buy. What is amusing is that while the NAR’s September fiasco was attributed to “concerns” over a government shutdown, the two month delayed Case Shiller print, which was for August, will be spun as no fears of a government shutdown in August, or something.

 

Listing the Top 5 cities in order of Y/Y price increase: Vegas +29.22%; San Francisco +25.4%; Los Angeles + 21.66; San Diego +21.5%; and….

Detroit +16.4%

That’s right: America’s biggest bankrupt city is among the Top 5 highest appreciating housing markets.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/SbNXjcc47TQ/story01.htm Tyler Durden

Moments ago hopes that the S&P would hit 1800 on an epic miss in the September retail sales were dashed after both the headline and ex-auto/gas numbers came largely in line. The total Seasonally Adjusted retail sales for September dipped modestly by 0.1%, on expectations of an unchanged print. Excluding autos the number was exactly in line with expectations at 0.4%, while ex autos and gas was also a very modest miss of 0.4% vs Exp. 0.5%. Still, hardly bad enough to send the S&P500 futures into the stratosphere. The biggest outliers by business category were motor vehicles which tumbled -2.2 in September, the biggest decline since October 2012 (did the US government suddenly stop making NINJA loans?), Miscellaneous stores and Clothing stores, down 1.2% and -0.5% respectively, while electronics and appliance stores rose 0.7% in September. In short: Americans may have no clothing as we enter the winter season, but at least they have the new iPad.

So while noted the number was hardly bad enough to send stocks surging, the ES-leading EURJPY pair seems to have found a third-wind bid in an attempt to expand the S&P500 multiple by at least another 0.1-0.2x today: could it be that algos just noticed that unadjusted retail sales tumbled by 9% from August to September.

Retail sales historic trend:

Charting the September retail sales broken down by category:

And by business:

Source: Census

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

The news keeps going from worse to worse-er for the administration and Obamacare. The latest hit, however, does not revolve around the dysfunctional healthcare.gov website, whose hundreds of millions of lines of faulty code will take a very long time to fix, but relates to Obama’s promises that individuals would be able to keep their existing healthcare plans following the rollout of the Affordable Care Act. The truth, as NBC reports, is they can’t but what’s worse is that Obama knew as early as July 2010 that 40 to 67 percent of customers will not be able to keep their policy. And that’s not all: since the 14 millions consumers who buy their insurance individually will be forced into comparable plans, they are all set to experience a “sticker shock” when “opting” for the mandatory alternatives.

From NBC:

President Obama repeatedly assured Americans that after the Affordable Care Act became law, people who liked their health insurance would be able to keep it. But millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years.

 

Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

The reason for the sticker shock: mandatory cadillac plan replacements:

Individual insurance plans with low premiums often lack basic benefits, such as prescription drug coverage, or carry high deductibles and out-of-pocket costs. The Affordable Care Act requires all companies to offer more benefits, such as mental health care, and also bars companies from denying coverage for preexisting conditions.

Obama, it turns out, knew all about this:

None of this should come as a shock to the Obama administration. The law states that policies in effect as of March 23, 2010 will be “grandfathered,” meaning consumers can keep those policies even though they don’t meet requirements of the new health care law. But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date — the deductible, co-pay, or benefits, for example — the policy would not be grandfathered. 

 

Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.” 

 

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

Enter the lies:

Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

 

“This says that when they made the promise, they knew half the people in this market outright couldn’t keep what they had and then they wrote the rules so that others couldn’t make it either,” said  Robert Laszewski, of Health Policy and Strategy Associates, a consultant who works for health industry firms. Laszewski estimates that 80 percent of those in the individual market will not be able to keep their current policies and will have to buy insurance that meets requirements of the new law, which generally requires a richer package of benefits than most policies today.

The White House was ready with a canned response:

“Nothing in the Affordable Care Act forces people out of their health plans: The law allows plans that covered people at the time the law was enacted to continue to offer that same coverage to the same enrollees – nothing has changed and that coverage can continue into 2014,” she said.

 

White House spokesman Jay Carney was asked about the president’s promise that consumers would be able to keep their health care. “What the president said and what everybody said all along is that there are going to be changes brought about by the Affordable Care Act to create minimum standards of coverage, minimum services that every insurance plan has to provide,” Carney said. “So it’s true that there are existing healthcare plans on the individual market that don’t meet those minimum standards and therefore do not qualify for the Affordable Care Act.”

But the reality is always different:

Other experts said that most consumers in the individual market will not be able to keep their policies. Nancy Thompson, senior vice president of CBIZ Benefits, which helps companies manage their employee benefits, says numbers in this market are hard to pin down, but that data from states and carriers suggests “anywhere from 50 to 75 percent” of individual policy holders will get cancellation letters. Kansas Insurance Commissioner Sandy Praeger, who chairs the health committee of the National Association of Insurance Commissioners, says that estimate is “probably about right.” She added that a few states are asking insurance companies to cancel and replace policies, rather than just amend them, to avoid confusion.

 

A spokesman for America’s Health Plans says there are no precise numbers on how many will receive cancellations letters or get notices that their current policies don’t meet ACA standards. In both cases, consumers will not be able to keep their current coverage.

 

Those getting the cancellation letters are often shocked and unhappy.

In other words, nobody is kicked out of their existing plan… they just can’t keep it. Teleprompted semantics at its absolute best, or worst.

Finally, a case study in socialist failure:

George Schwab, 62, of North Carolina, said he was “perfectly happy” with his plan from Blue Cross Blue Shield, which also insured his wife for a $228 monthly premium. But this past September, he was surprised to receive a letter saying his policy was no longer available. The “comparable” plan the insurance company offered him carried a $1,208 monthly premium and a $5,500 deductible.

 

And the best option he’s found on the exchange so far offered a 415 percent jump in premium, to $948 a month.

 

“The deductible is less,” he said, “But the plan doesn’t meet my needs. Its unaffordable.”

 

“I’m sitting here looking at this, thinking we ought to just pay the fine and just get insurance when we’re sick,” Schwab added. “Everybody’s worried about whether the website works or not, but that’s fixable. That’s just the tip of the iceberg. This stuff isn’t fix
able.”

It isn’t, but who cares? By the time the realization that micromaganging anything and everything always fails, it will be someone else’s problem.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CaIz9ox-NJs/story01.htm Tyler Durden

• U.S. spy chiefs face Congress amid spying rift with Europe (Reuters)
• Deutsche Bank income hit by €1.2bn of legal provisions (FT)
• China’s second tapering attempt fails: China central bank seeks to reassure money markets after rate spike (Reuters)
• UBS Takes Action Against Staff in Foreign-Exchange Probe (WSJ)
• Saudi Arabia frees man jailed for Mohammad tweets (Reuters)
• Tax Revolts Hit Hollande as Farmers, Soccer Clubs Protest (BBG)
• German parliament to meet over U.S. spying scandal (Reuters)
• Google Nears Smartwatch Launch (WSJ)
• How to end gridlock in DC? Pork projects (Reuters)
• UBS ordered to increase capital reserves (FT)
• U.K. Mortgage Approvals Rise to Highest in 5 1/2 Years (BBG)
• NSA Spying Allegations Put Google on Hot Seat in Brazil (BBG)
• Judge blocks part of Texas law restricting abortion (Reuters)
• Man Making Ireland Tax Avoidance Hub Proves Local Hero (BBG)

 

Overnight Media Digest

WSJ

* The chairwoman of the Senate Intelligence Committee, Dianne Feinstein, promised a total review of all U.S. spying programs for the first time in decades, and said she expected that the White House would end all spying on leaders of allied countries.

* Bond dealer Cantor Fitzgerald has sought to make Nevada’s legal sports books more like a financial platform but found the old ills of gambling hard to escape.

* Central banks in Russia and elsewhere are cutting purchase of gold, further weighing on prices of the metal. Prices are down 19 percent year to date. The last time gold prices posted an annual loss was 2000.

* Apple reported a third consecutive quarter of declining profits, but showed signs that both prices and profit margins are stabilizing despite heightened competition for its iPhone and iPad.

* After buying back its own shares from investors this year for the first time since the financial crisis in 2008, Morgan Stanley is considering asking the Federal Reserve for permission to purchase more stock next year.

* Consol Energy agreed to sell five Appalachian coal mines to Murray Energy, in a deal valued at $3.5 billion, its biggest step yet in shifting the focus of its business toward natural gas and away from coal.

* Higher mortgage rates and rising home prices scared off prospective home buyers in September, sparking the fourth straight monthly drop in a key measure of home sales.

* Aereo Inc’s upstart TV streaming service has provoked a legal onslaught from broadcast networks. But even if it wins that fight, it still has to overcome more-pedestrian issues, like making sure it can pay for the electricity it needs.

* Goldman Sachs said it has spent the past year working to improve the work-life balance of most-junior employees, known on Wall Street as analysts, by reducing their hours and other measures.

* The federal government is set to slap Infosys Ltd with the largest immigration fine ever, claiming the Indian outsourcing giant illegally placed workers on visitor, rather than work, visas at big corporate clients across the U.S.

The government is expected to announce Wednesday it will fine Infosys about $35 million, according to people close to the matter.

 

FT

Britain’s Chancellor of the Exchequer, George Osborne, is set to announce the country’s plans to issue the first Islamic bond outside the Muslim world, hoping that the 200 million pound ($322.62 million) bond will act as a catalyst for London to become a leading player in the sharia-compliant finance market.

Swiss prosecutors have begun a criminal investigation into Formula One Chief Executive Bernie Ecclestone for bribing a German banker to smooth the sale of a stake in the motor racing business to private equity firm CVC in 2006.

G4S, the world’s largest security services firm, denied allegations of its involvement in the abuse – including electric shock treatment and forced injections – of inmates at its Mangaung prison in South Africa.

Germany’s Deutsche Boerse said it had received an offer from the United States to settle a probe into the exchange operator’s alleged breach of U.S. sanctions against Iran for $152 million.

European aerospace group EADS is planning to axe jobs and cut costs in a bid to restructure its defence business, which has been languished due to Europe’s long-term decline in military spending.

 

NYT

* President Obama was poised to order a ban on spying on heads of allied states in response to a deepening diplomatic crisis over reports that the National Security Agency had for years targeted the cellphone of Chancellor Angela Merkel of Germany.

* Microloans, born of anti-poverty efforts in developing countries, is attracting American clients who do not qualify for credit cards or traditional bank loans.

* Consol Energy Inc, the largest coal producer in the eastern United States, said on Monday that it was selling five highly automated mines – about half of its production capacity – to focus instead on natural gas and on mines that produce coal for export.

* Apple Inc now has more product offerings. And Apple now sells its products in more places. But for the third consecutive quarter, Apple does not have more profit.

* New ways to monitor students around the clock raise questions about whether educators can or should legally discipline children for online outbursts.

* In a shift away from robots made to perform in factories, designers are putting the “human” into humanoids so that they can safely interact in public.

* Governor Rick Snyder of Michigan, in testimony on Monday, forcefully defended Detroit’s bankruptcy filing as a last-ditch effort to stem the city’s decades-long financial decline.

* Marilyn Tavenner, who runs the Centers for Medicare and Medicaid Services, will testify on Tuesday before a House panel on the problems with the health care website.

* A federal judge on Monday sentenced former Representative Rick Renzi to three years in prison for convictions on public corruption, money laundering and othe
r charges, capping a corruption case prosecutors said began more than a decade ago.

* The autobiography of the pop star Morrissey, which has become a quick sensation in Britain, has found an American publisher. G.P. Putnam’s Sons, an imprint of Penguin Random House, acquired the memoir, two people involved in the negotiations said on Monday.

 

Canada

THE GLOBE AND MAIL

* Canadian Senator Mike Duffy says staff in the office of Prime Minister Stephen Harper arranged for a Conservative Party lawyer to cover his legal fees – a payment that was in addition to the cheque for C$90,000 that Harper’s former chief of staff wrote to foot the bill for Duffy’s improperly claimed expenses.

* The world’s first Bitcoin ATM goes live on Tuesday – and it will be installed inside a downtown Vancouver coffee shop. Mitchell Demeter, co-founder of the Vancouver-based store Bitcoiniacs, is the man behind the automated teller machine’s arrival.

Reports in the business section:

* Private-sector economists are pressing Canadian Finance Minister Jim Flaherty to keep a closer eye on Canada’s housing market in light of persistently low interest rates.

* The head of Canada’s wireless lobby group, Bernard Lord, says unneeded regulation and a lack of available spectrum is jeopardizing the country’s status as a place with the fastest networks in the world.

NATIONAL POST

* Another increase in median wait times for medical treatment despite fast-growing public healthcare spending means Canada should look abroad for alternative ways of delivering universal healthcare with private options, say the authors of a new report.

* A 71-year-old Iranian-born man with a legally altered name faces three criminal charges in connection with an alleged attempt to bring explosive material onto an airplane. He was charged on Monday over the incident, which paralyzed Montreal’s main airport on Sunday for several hours and caused a neighborhood to be shut down for a police search.

FINANCIAL POST

* The Canadian government has no plans for now to clamp down on the housing market even though prices are rising again, Finance Minister Jim Flaherty said on Monday, but he pledged to investigate whether the price uptick looks to be more than temporary.

* Canada’s oil and gas industry is “losing the war” against anti-hydrocarbon activism as the balance of power tilts in favor of project opponents, says the head of Quebec’s Oil and Gas Association.

 

China

CHINA SECURITIES JOURNAL

— China may launch a pilot scheme in some cities as early as next year to promote standardisation and energy saving in the property development market.

SHANGHAI SECURITIES NEWS

— Internet firm Baidu raised 1 billion yuan ($164.33 million) in just two hours for its first wealth management product.

— Healthcare for the elderly is set to be a long-term hot spot for China. By 2020, the country’s health service sector will be worth over 8 trillion yuan ($1.31 trillion), according to the State Council. This has prompted the country to spend 2.2 billion yuan ($361.52 million) to spur development in the sector.

SECURITIES TIMES

— China may introduce a series of reform measures in the Shanghai Free Trade Zone, including raising the ceiling on yuan deposit rates and allowing foreign companies registered in the zone to trade Chinese stocks and futures.

— Taobao, an online marketplace owned by Alibaba, will soon be granted a licence to distribute mutual fund products.

PEOPLE’S DAILY

— Reform should be aimed at eliminating special interest within the Communist Party, the official mouthpiece paper said in an editorial. It added that the source of the Party’s power is the interest of the public.

CHINA DAILY

— Close to 80 percent of doctors say they do not want their children to pursue a career in medicine, according to a survey by the Chinese Medical Doctor Association. This is up from around 60 percent in 2009, with doctors citing poor salaries and growing tension with patients.

Shanghai Daily

— A merger between Jiefang Daily Group and Wenhui-Xinmin United Press group has created the country’s biggest newspaper company, with total assets of 20.87 billion yuan. The publisher of the new Shanghai United Media Group, Qiu Xin, said the move will help “promote Shanghai’s media influence”.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Advanced Energy (AEIS) upgraded to Buy from Hold at Needham
Apple (AAPL) upgraded to Outperform from Neutral at RW Baird
Arcos Dorados (ARCO) upgraded to Overweight from Neutral at JPMorgan
Altra Holdings (AIMC) upgraded to Buy from Underperform at BofA/Merrill
Costamare (CMRE) upgraded to Overweight from Neutral at JPMorgan
Green Dot (GDOT) upgraded to Overweight from Neutral at Piper Jaffray
Marketo (MKTO) upgraded to Buy from Neutral at Goldman
Onconova Therapeutics (ONTX) upgraded to Buy from Neutral at Citigroup
Yahoo (YHOO) upgraded to Outperform from Market Perform at Bernstein

Downgrades

American Capital Agency (AGNC) downgraded to Neutral from Buy at BofA/Merrill
Banco Bilbao (BBVA) downgraded to Neutral from Outperform at Credit Suisse
Banco Bilbao (BBVA) downgraded to Underperform from Neutral at BofA/Merrill
CAI International (CAP) downgraded to Market Perform from Outperform at Cowen
Changyou.com (CYOU) downgraded to Hold from Buy at Brean Capital
Coca-Cola HBC (OCCH) downgraded to Reduce from Neutral at Nomura
Donaldson (DCI) downgraded to Neutral from Buy at BofA/Merrill
Eagle Rock Energy (EROC) downgraded to Neutral from Buy at BofA/Merrill
Goldcorp (GG) downgraded to Neutral from Overweight at HSBC
Innophos Holdings (IPHS) downgraded to Hold from Buy at KeyBanc
Key Energy (KEG) downgraded to Sell from Hold at Wunderlich
Komatsu (KMTUY) downgraded to Hold from Buy at Jefferies
Michael Kors (KORS) downgraded to Market Perform from Outperform at Wells Fargo
Sunstone Hotel (SHO) downgraded to Neutral from Buy at ISI Group
TAL International (TAL) downgraded to Market Perform from Outperform at Cowen
Textainer (TGH) downgraded to Market Perform from Outperform at Cowen
UIL Holdings (UIL) downgraded to Sector Perform from Outperform at RBC Capital
Volcano (VOLC) downgraded to Hold from Buy at Canaccord
Volcano (VOLC) downgraded to Neutral from Outperform at Credit Suisse
Volcano (VOLC) downgraded to Neutral from Overweight at JPMorgan
Wausau Paper (WPP) downgraded to Hold from Buy at Deutsche Bank

Initiations

A.P. Pharma (APPA) initiated with a Buy at Brean Capital
AmerisourceBergen (ABC) initiated with a Market Perform at FBR Capital
Bill Barrett (BBG) initiated with a Buy at KeyBanc
CBS (CBS) initiated with an Outperform at FBR Capital
Cardinal Health (CAH) initiated with an Outperform at FBR Capital
Cherry Hill Mortgage (CHMI) initiated with a Buy at Citigroup
Cherry Hill Mortgage (CHMI) initiated with an Overweight at Barclays
Dollar General (DG) initiated with a Positive at Susquehanna
GameStop (GME) initiated with a Buy at Stifel
Interpublic Group (IPG) initiated with a Market Perform at FBR Capital
McGraw Hill Financial (MHFI) initiated with an Outperform at FBR Capital
McKesson (MCK) initiated with an Outperform at FBR Capital
Moody’s (MCO) initiated with an Outperform at FBR Capital
Multi-Color (LABL) initiated with an Outperform at BMO Capital
NL Industries (NL) initiated with an Outperform at Credit Suisse
OCI Partners (OCIP) initiated with a Buy at BofA/Merrill
OCI Partners (OCIP) initiated with a Neutral at Citigroup
Omnicom (OMC) initiated with an Outperform at FBR
Capital
Potbelly (PBPB) initiated with a Neutral at Goldman
Potbelly (PBPB) initiated with an Overweight at Piper Jaffray

HOT STOCKS

Sears Holdings (SHLD) evaluating separating Lands’ End business and Sears Auto Center, announced sale of five Canadian store leases for C$400M
UBS (UBS) said received requests from various authorities relating to their foreign exchange businesses, said FINMA order could delay return on equity target
Lloyds Banking (LYG) said talks with regulators commenced on dividends
Apple (AAPL) to announce any changes to current capital plan in first part of 2014
Plum Creek Timber (PCL) to acquire $1.1B in acres from MeadWestvaco (MWV); MWV to return $665M of PCL transaction to holders
NTT (NTT) to acquire Virtela for $525M
Electronic Arts (EA) said Tiger Woods no longer associated with golf title

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

M.D.C. Holdings (MDC), Regal-Beloit (RBC), U.S. Steel (X), Reinsurance Group (RGA), Olin Corp. (OLN),  CTS Corporation (CTS), HealthSouth (HLS), Apple (AAPL), PartnerRe (PRE), Jones Lang LaSalle (JLL), Hartford Financial (HIG), Kaman (KAMN), Intevac (IVAC), CNO Financial (CNO), Plum Creek Timber (PCL), Nutrisystem (NTRI), Integrated Device (IDTI)

Companies that missed consensus earnings expectations include:

Aetna (AET),  NewMarket (NEU), LINN Energy (LINE), Compass Minerals (CMP), Invesco Mortgage (IVR), ARMOUR Residential (ARR), Herbalife (HLF), Celadon Group (CGI), Seagate (STX), Wausau Paper (WPP)

Companies that matched consensus earnings expectations include:

Air Products (APD), Huntsman (HUN), Sensata (ST), Denny’s (DENN)

NEWSPAPERS/WEBSITES

• The end could be near for cookies that marketers deploy on Web browsers to track people’s online movements, serve targeted advertising and amass valuable user profiles. Microsoft (MSFT), Google (GOOG) and Facebook (FB) have said they are developing systems to plug into and control this  data in ways that bypass the more than a thousand software companies that place cookies on websites, the Wall Street Journal reports
• After buying back its own shares from investors this year for the first time since the financial crisis, Morgan Stanley (MS) is considering asking the Fed for permission to purchase more stock next year, a move aimed at boosting its middling returns on equity, the Wall Street Journal reports
• Agnico Eagle Mines (AEM) is considering selling a minority stake in its Meliadine gold project in the Canadian sub Arctic, sources say, Reuters reports
• Apple’s (AAPL) forecast for the slowest holiday sales growth in a half decade reflects how iPhones and iPads aren’t providing the growth surges they once did as competition accelerates in the saturated mobile market, Bloomberg reports
• Twitter (TWTR) kicked off the road show for its IPO with a low-key affair compared with Facebook’s (FB), reflecting Twitter’s quieter approach to the process, underscored by its decisions to file confidentially and limit private trading of its shares, Bloomberg reports
• The debut of Brixmor Property Group (BRX) is adding fuel to what is already the biggest year for U.S. real estate IPOs in about a decade. The shopping-center landlord, owned by Blackstone (BX), is set to raise as much as $905.6M including extra shares for underwriters, Bloomberg reports

SYNDICATE

Artisan Partners (APAM) files to sell 4.8M shares of common stock
BankUnited (BKU) 9M share Secondary priced at $30.75
Colony Financial (CLNY) files to sell 10M shares of common stock
F.N.B. Corp. (FNB) to offer up to $50M worth of common stock
Plum Creek Timber (PCL) files to sell 14M shares of common stock
SL Green Realty (SLG) files to sell 2.6M shares of common stock
Sunstone Hotel (SHO) files to sell 20M shares of common stock
Tableau Software (DATA) files to sell common stock for holders

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/D9s7UShVeKw/story01.htm Tyler Durden

For those curious what Bernanke’s market may do today, we flash back to yesterday’s AM summary as follows: “Just as it is easy being a weatherman in San Diego (“the weather will be… nice. Back to you“), so the same inductive analysis can be applied to another week of stocks in Bernanke’s centrally planned market: “stocks will be… up.” Add to this yesterday’s revelations in which “JPM Sees “Most Extreme Ever Excess Liquidity” Bubble After $3 Trillion “Created” In First 9 Months Of 2013” and the full picture is clear. So while yesterday’s overnight meltup has yet to take place, there is lots of time before the 3:30 pm ramp (although today’s modest POMO of $1.25-$1.75 billion may dent the frothiness). Especially once the market recalls that the NOctaper FOMC 2-day meeting starts today.

Looking at the key overnight events, China’s most recent tapering experiment, in which the PBOC refused to provide liquidity via reverse repos, ended last night after a two week drought when The People’s Bank of China conducted 13 billion yuan of 7-day reverse repurchase agreements at a yield of 4.1%, which initially resulted in a 1.4% pop in the Shanghai Composite spurred by the fresh liquidity, which however afterward dropped -1.1% and closed -0.2%, while the ChiNext index of smaller cos. -4.7%, headed for biggest drop since June 24. “We were rising in the morning because of the reverse repo, but after pricing that in, we have to note the market is still in a weak mode,’’ says Zhang Haidong, analyst at Tebon Securities in Shanghai. Still, interbank liquidity markets eased with China’s one-month Shibor falling 32 bps, most since Sept. 26, to 6.1620%, while the three-month Shibor decreases to 4.6966% from 4.6975% yesterday. Even so, both overnight and 1Week SHIBOR rose by 1.2 bps and 5.3 bps respectively. 

Elsewhere, in Japan, attention has been drawn to the earnings calendar where results from a number of large industrials including Hitachi, Hino Motors and the domestic railway companies are due to be announced as we go to print. Overnight, the Reserve Bank of India has decided to hike its repo rate by 25bp. Finally, Europe has had a quiet session, where the key event was French Industry Minister once again saying the Euro is too strong, pushing the EURUSD pair lower, as well as very disappointing results from Deutsche Bank and UBS due to a surge in litigation reserves, pushing the financial sector lower.

Today’s US event docket:

• Two day Fed Reserve FOMC meeting begins
• PPI (m/m), cons 0.2%
• Retail sales advance m/m 0.0%
• Consumer confidence, cons 75.0
• Case Shiller comp-20 city m/m, 12.40%
• For sale: $45bn 4w bills & $35bn 5y notes

Market Recap from RanSquawk

Stocks in Europe have recovered from a lower open, with Bunds also moving into positive territory on the back of month-end, as well as coupon/redemption related flow. As a guide, the NCR for the week is positive with around EUR 44bln in coupon/redemptions coming from Italy and Spain later on this week. The move higher in stocks was led by oil & gas sector, with BP trading up around 6% following earnings, however consumer services and financials underperformed after Deutsche Bank and UBS failed to meet analyst expectations.

Nevertheless, despite less than impressive earnings from heavy weight financials, together with reports that European banks’ non-performing loans have doubled in four years to reach close to EUR 1trl and are expected to keep rising, has failed to translate into wider credit spreads. Also of note, Eurogroup head Dijsselbloem has proposed an adjustment to the stability pact, in which a country receives more time to correct excessive deficits on the condition that the country is bound to particular reforms within the time period in question.

Going forward, market participants will get to digest the release of the latest PPI, Retail Sales and also Consumer Confidence reports from the US, while the US Treasury will sell USD 35bln in 5y notes. On the corporate front, attention will turn to earnings from Pfizer and Gilead Sciences.

Overnight news bulletin via BBG and RanSquawk

• Eurogroup head Dijsselbloem has proposed an adjustment to the stability pact, in which a country receives more time to correct excessive deficits on the condition that the country is bound to particular reforms within the time period in question.
• UBS and Deutsche Bank failed to meet analyst expectations this morning, while BP shares gained over 5% following earnings.
• The PBoC relieved liquidity concerns overnight, injecting CNY 13bln via 7 day reverse repos; first injection in two weeks.
• The Senate hearing where Janet Yellen’s nomination to head the Fed will be considered by the Senate Banking Committee is planned for Nov. 14, according to an aide.
• Treasuries gain before Fed’s two-day policy meeting begins in Washington and as week’s $96b note auctions continue with $35b 5Y notes.
• 5Y to be sold today yield 1.314% in WI trading; drew 1.436% in Sept. after 1.624% in August, highest in over two years. 2Y notes sold yesterday  stopped through 1pm WI level by ~0.5bp, highest bid-to-cover since April
• Fed meeting concludes tomorrow, with policy statement at 2pm in Washington; for views on tapering
• Financial-market bubbles are proving a more pressing threat than inflation to Fed officials who’ve bought trillions of dollars in bonds and kept the  target for short-term interest rates near zero since 2008
• U.K. mortgage approvals rose to 66,735 in September, the most since February 2008, compared with a revised 63,396 the previous month; gross mortgage lending was GBP15.6b, the highest since October 2008
• Australia’s central bank Governor Glenn Stevens said AUD’s level isn’t supported by costs and productivity in the economy and the nation’s terms of trade are more likely to fall than rise
• China’s money-market rates climbed to the highest levels since July as the central bank’s first injection of funds in two weeks failed to alleviate a cash squeeze
• The European Commission will take an extra month to decide on rules affecting how banks calculate their capital ratios after Scandinavia criticized existing plans that the region argues would unduly penalize its banks
• Japanese companies from Toyota Motor Corp. to Sony Corp. are poised to report earnings that will provide evidence on whether Abe’s policies are leading to a sustained economic recovery
• Sovereign yields mostly lower, EU peripheral spreads little changed. Nikkei -0.5%, Asian equities mixed; European stocks higher, U.S. equity-index futures mixed. WTI crude, gold lower; copper gains

Asian Headlines

The PBoC relieved liquidity concerns overnight, injecting CNY 13bln via 7 day reverse repos; first injection in two weeks. Reverse-repo was conducted at 4.1%, a higher interest rate than the previous 3.9% operation.

EU & UK Headlines

Eurogroup head Dijsselbloem has proposed an adjustment to the stability pact, in which a country receives more time to correct excessive deficits on the condition that the country is bound to particular reforms within the time period in question.

Analysts at Commerzbank believe that the ECB may make verbal intervention on declining excess liquidity and halt SMP sterilisation to boost liquidity.

Separately, concerns over bank deleveraging ahead of ECB’s asset quality review could undermine European stocks according to analysts at Citigroup.

UK Mortgage Approvals (Se
p) M/M 66.7k vs. Exp. 66.0k (Prev. 62.2k, Rev. 63.4k) – Highest since February 2008.

UK Money Supply M4 (Sep) M/M 0.6% vs. Exp. 0.5% (Prev. 0.7%)
UK Net Lending Sec. On Dwellings (Sep) M/M 1.0bln vs. Exp. 1.3bln (Prev. 1.0bln, Rev. 1.1bln)

Barclays month-end extension: Euro Agg +0.08y
Barclays month-end extension: Sterling Agg +0.02y

US Headlines

The Senate hearing where Janet Yellen’s nomination to head the Fed will be considered by the Senate Banking Committee is planned for Nov. 14, according to an aide. Barclays month-end extension: Treasury +0.07y

Equities

Major European equity indices have recovered following a lacklustre open and moved into positive territory, led by oil & gas sector where BP gained around 5% following earnings. At the same time, financials and consumer related services under performed throughout the session, also driven by unimpressive earnings by UBS and Deutsche Bank.

European banks’ non-performing loans have doubled in four years to reach close to EUR 1trl and are expected to keep rising, according to a PwC report. (FT-More)

After the closing bell on Wall Street yesterday, Apple reported Q4 EPS USD 8.26 vs. Exp. USD 7.93 and Q4 revenue USD 37.5bln vs. Exp. USD 36.84bln. Q4 gross margin 37% vs. Exp. 36.9%. Co. CEO said the board and management will consider wide range of capital return issues and announce any changes to current program in first part of new calendar year.

FX

EUR/USD and GBP/USD traded sorter this morning, with GBP/USD falling below its 21DMA line amid amid a firmer USD as market participants positioned for a slew of risk events later on today and also the upcoming FOMC decision. Elsewhere, AUD/USD also traded lower, falling below the 21DMA line in the process, with spot gold under pressure in early European trading hours which resulted in prices moving below the 50DMA line.

Commodities

Goldman Sachs cut its 2013 OPEC crude output forecast by 190,000bpd on Libya and maintained its USD 100/bbl near term Brent crude forecast.

Separately, JP Morgan have increased their Y/Y global oil demand forecast by 90,000bpd for 2013 and 140,000bpd for 2014 on the basis that the impact to supply from the government shutdown is to be relatively low and that Chinese demand will be able to offset the fall in demand seen in Europe and Japan.

Libya are to reopen the Al-Sharara oil field that suffered a shutdown due to industrial strike action, according to the country’s oil minister.

According to Chinese state-backed research firm, China’s consumption of refined copper is expected to grow more quickly in 2014, though not fast enough to boost imports significantly as production increases more quickly. Copper average price seen at USD 6800/t in 2014 by SocGen.

SocGen’s macro team summarizes the main macro catalysts:

The start of the week has been subdued, with US 10y swaps moving in a tight 4bps range thanks to a wait-and-see mode ahead of the Federal Reserve’s seminal two-day FOMC meeting, which kicks off today. The dollar index was last trading at 79.210, perilously close to the 2013 low of 78.918, set on 1 February 2013, emphasising that the FX markets have already priced in the likelihood of the Fed delaying tapering until late Q1 2014. So, any risks for the FX bets would probably be from a less-than-dovish tone from the Fed bringing early January 2014 tapering back into contention. In the extreme, increased asset purchases cannot be ruled out, but data, while softer, has not been woeful enough to suggest the pace of QE can be justifiably marked up.

Meanwhile, the worst storm in the UK of the past five years ensured that trading volumes remained on the low side in the UK markets yesterday, but that did not stop the pound from strengthening further towards the four-week high of 1.6260. A strong Q3 GDP figure last week, followed by yesterday’s house price data showing a ninth monthly uptick in a row (+0.5% mom), has further intensified calls for an upside risk to the UK’s growth estimates. In the UK today, we have the mortgage approval data, for which the consensus is quite upbeat at ~66k approvals and so are we at ~67k vs 62.2k previously. Will this lead cable higher or will the market await the FOMC outcome tomorrow?

In Japan, automobile sales proved that Abenomics is working thanks to the weaker yen, but this is drawing fresh criticism from corporate America. An ~11% yen depreciation in 2013 has helped the Japanese auto majors to incentivise customers by dropping prices on their popular models and consequently boosting sales. The latest quarterly sales report shows that Toyota has outsold Ford Motor Co. in the US for the first time in 15 quarters. Ford CEO Mullaly has been one of Japan’s strongest critics, calling the country a “currency manipulator”.

On the agenda today, we have US consumer confidence (SG forecast 75.0), retail sales and the S&P Case-Shiller. Spanish retail sales and ECB member Nowotny’s speech are due in the euro area. Hungary’s central bank is expected to cut its benchmark rate by 20bps to 3.4%, as the sharp HUF appreciation of ~3.57% vs USD (1.72% vs EUR) since the beginning of the month gives it enough leeway to further reduce the already low benchmark rates.

Finally, DB’s Jim Reid as usual provides the full overnight summary

Although yesterday’s industrial production headline print of +0.6% MoM beat expectations of +0.4%, the details were rather soft. The monthly increase was largely due to utilities (+4.4% vs. -0.9% previously), while manufacturing IP, the largest component of the report, was up only +0.1%. Furthermore, Manufacturing excluding autos and parts was unchanged on the month. On a similar note, the Dallas Fed manufacturing survey came in at only 3.6 versus expectations of 10.0. In terms of the market reaction, 10yr UST yields touched a session low of 2.498%, and gold touched a high of $1362/oz shortly after the data was released. But these moves were pared into the close and 10yr yields finished 1.5bp higher on the day at 2.52% while gold closed 0.15% higher. Equities were mostly rangebound yesterday – The S&P500 added 0.13% for its smallest up/down move in a week. But the poor US dataflow did little to stop the S&P 500 carving out another record high. After the NY closing bell, Apple reported a small beat in both its Q3 EPS ($8.26 vs $7.93) and revenues ($37.5 ve $36.8bn).

The stock traded down 3% or so in the aftermarket despite the earnings beat and despite selling almost 34 million iPhones in the quarter, a 26%  increase in shipments over last year. There were concerns about its low guidance for sales in the upcoming holiday season.

Turning to the overnight markets, news that the PBoC has injected liquidity into the Chinese banking system via reverse repos helped Asian equities recover from early losses. The gains have been shortlived though, and most indices are trading back down at the overnight lows, led by Chinese A-shares (-1.1%) and the Nikkei (-1.1%). The PBOC’s reverse repos, which were only around RMB13bn, were the first liquidity injections in two weeks from the central bank, but it has brought little relief to the seven day repo rate which is up 44bp at 5.02% today coming into the volatile end of month period. Other short term rates are lower however, such as the 1month SHIBOR which is 31bp lower at 6.16%. In Japan, attention has been drawn to the earnings calendar where results from a number of large industrials including Hitachi, Hino Motors and the domestic railway companies are due to be announced as we go to print. Overnight, the Reserve Bank of India has decided to hike its repo rate by 25bp.

Turning to the day ahead, US economic releases will be garnering most of the attention again in what is a big week on the data docket. The most closely
watched of these will probably be September re
tail sales where the market consensus is looking for zero growth in the headline. In addition, the conference board consumer confidence report will make for interesting reading given it may show if sentiment was affected by the government shutdown.

Other US data to be released today include business inventories, PPI and Case-shiller house prices. US$35n in 5yr T-notes will be auctioned today. In  Europe, lending data for the UK and Spanish retail sales are the major data releases. There are also Q3 results from a number of UK banks.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RdtF0cnueUk/story01.htm Tyler Durden

While the biggest problem facing US bands is lack of demand (and supply, since it is far more profitable for banks to “invest” reserves in risk assets using excess deposits as initial margin) for loans, Japan doesn’t have such a problem. At least not, when the loans are made to “gangsters” such as the Yakuza. AFP reports that executives at Mizuho Financial Group, one of Japan’s largest banks, knew the firm was doing business with gangsters but failed to stop it, a panel said Monday, as Japan’s finance minister slammed the banking giant over the affair.

The bank has been in the public spotlight since it emerged last month that it processed hundreds of loans worth about $2 million for the country’s notorious Yakuza crime syndicates. And while in the US the punishment for banks caught in criminal behavior is a simple slap on the wrist and a settlement paid using TARP money, in Japan bank CEO still have some semblance of honor. Bloomberg adds that in the aftermath of the revelations, Mizuho’s president Yasuhiro Sato will give up six months of pay ahead of more penalties, and will resign his Chairmanship at Mizuho Bank while keeping the post at the parent company. Some 52 other current executives will also be penalized.

More:

Sato bowed in apology at a news briefing in Tokyo, hours after submitting a report to the Financial Services Agency outlining measures such as database sharing and the addition of an outside director to prevent further transactions with yakuza crime syndicates. Lawyers commissioned by Mizuho to investigate the loans earlier said the bank’s shortcomings stemmed from lax internal controls rather than attempts to mislead regulators.

 

“Mizuho’s internal punishment won’t be negative for the share price as Sato remains president,” said Takehito Yamanaka, an analyst at Credit Suisse Group AG in Tokyo. “We still need to pay careful attention to whether the FSA will hand down any additional severe punishment.”

 

Sato, 61, who has driven measures designed to improve management at Mizuho since taking the post in June 2011, said he didn’t consider stepping down even while acknowledging the incident dented his authority.

 

“Mizuho’s top management including myself deeply regret this issue,” he said. “My leadership was severely hurt, but I don’t think it’s impossible to recover.”

…

 

The lender failed to act on 200 million yen ($2 million) in about 230 transactions with members of crime groups through its Orient Corp. (8585) affiliate, the agency said on Sept. 27. There may have been about 460 transactions initially, Sato said yesterday, without giving a yen amount.

And so on.

While it is a given that banks will continue to engage inwhatever activities provide them with marginal revenue, criminal or otherwise, perhaps the most jarring news in the above story is that the once proud Japanese Yakuza was forced to seek a paltry $2 million in 230 transactions, or about $10k per loan. If there is any better indication of just how bad the Japanese economy is, than the local mob being forced to seek bank loans, we have yet to hear it.

Finally, Japanese banks handing over loans to the mob is hardly as bad as the US, where considering the government has contemplated launching RICO cases against not just one or two US banks, the banks are the mob.

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

Usually what goes up normally ends up coming back down to Earth with a damn great thud. Well, that was long ago with good old Isaac Newton and the apple story. Apple might well be part of the story these days as an example of things that are going up but that have ascended so high for the moment that they have almost vanished from sight. But, there is simply no reason to defy the laws of Newton on Gravity. Negating the laws of gravity in such a way as to turn Newton on his own head is exactly what the stock market is doing right now. Antigravity might not exist in the real world but there is a theory that is refuted by the Gravity Establishment as to the means of blocking gravity effects on bodies. Have the stock markets and the financial wizards just put that into practice and is there some way of explaining why the stock market has increased yet again with no apparent reason?

When there’s good news these days the financial markets increase. When there’s bad news it just does the same. The laws of cause and effect, the theories of rising and falling? They don’t hold anymore, apparently. You can change the text-book baloney and learn how things really work today. Increase in the markets happen whatever you do.

• Yet again the Dow Jones Industrial Average increased on Friday 25th Octoberclosing up (with an increase of 0.4%).
• That’s the 11th time in a row out of the last 13 trading days.
• It seems like this is becoming the norm.
• The DJIA had already increased 11 times in a row out of 12 trading sessions inSeptember 2013.
• Is this a taste of things to come?
• All of that in October has been right in the midst of the US federal-government shutdown fiasco and the dire figures that have just been released on unemployment in the country.
• The official figure for unemployment in the USA has dropped to 7.2% (with a reduction in unemployment of 148, 000), but that’s only because there are people that are so discouraged from actually seeking employment that they have been dropped from the figures.
• Real unemployment is double that figure today, but governments will never talk about real unemployment figures.
• It wouldn’t do to sap the moral of the people would it too much; better to stuff the growing unemployed numbers behind some other less-important problem like what a neutered male Portuguese-Water dog might be up to in the gardens of some house along Pennsylvania Avenue.
• Jobs haven’t been created any more than the Federal Reserve’s efforts on Quantitative Easing have done anything to improve the stability of the US economy.
• The agreement between the Republicans and the Democrats is only temporary and will by January 2014 end up on the political and economic agenda once again.

The financial markets are therefore increasing with no real apparent reason to do so. Where’s the justification and are they defying the laws that have been established for decades now? Once upon a time bad news in politics and economic turmoil meant a crash. Now, it seems as if whatever happens, the stock prices just rise and carry on rising.The financial markets are disconnected from the reality of the economy and on a drip feed direct-line into the Federal Reserve these days. It won’t take too much analysis to see that it’s when the financial markets become isolated from reality. The financial markets are suffering from a depersonalization disorder and that spells trouble: Bubble Trouble!

How wrong could the Federal Reserve have been pumping $85 billion a month into the economy (or rather giving it to the banks to play on the stock markets with and then strike it rich)? How on earth was it possible to imagine that if you give someone such a sum that they will hand some of it out to the people down below? Ben Bernanke threatened in veiled false promises to throw us the money from his helicopter. We never even saw it before it got carried away in thebanksters’ wind. It was just a lot of hot air, wasn’t it?

The market is supposed to reflect the buyers demand for a share and the availability of that stock on the market. But, the prices are too high and way above what they should be simply because the economy is not sustaining the increases in prices of shares today. The growth of the economy is so slow; it’s almost non-existent. How is it possible for a share price to be maintained if the economy is not increasing too?

• Apple’s shares are valued at 13 times more than the profits that are generated by the company’s annual earnings per share today.
• Google is valued at 28.4 times its earnings.
• Facebook is way ahead and stands at 229 times its share earnings.
• That’s a price-earnings ratio that is out of control today and they are just a few of the examples.

The US financial markets are surfing on a wave; but usually waves end up breaking and they come crashing down too. The smile will be wiped off the face of the financiers. The only question is when exactly that will end up happening. It would certainly be worth our while to cash in now and take the winnings and to certainly go elsewhere rather than invest in the Federal Reserve’s self-created bubble. It can only spell trouble, with or without Bernanke’s help.

Defying or negating the laws of gravity is impossible. You might be able to create a shield to block it and it might just be that sort of thing that has happened with the QE-injections of unconventional monetary policies. Bring on the loose money…forever! May the increases commence (yet again) on the stock markets!

hould we get rid of the rating agencies? Rate them yourself!

Originally posted: Financial Markets: Negating the Laws of Gravity

 

You might also enjoy:Blatant Housing-Bubble: Stating the Obvious | Let’s Downgrade S&P, Moody’s and Fitch For Once | US Still Living on Borrowed Time | (In)Direct Slavery: We’re All Guilty | The Nobel Prize: Do We Have to Agree? | Revolution Costs | Petrol Increase because Traders Can’t Read | Darfur: The Land of Gold(s) | Obamacare: I’ve Started So I’ll Finish | USA: Uncle Sam is Dead | Where Washington Should Go for Money: Havens | Sugar Rush is on | Human Capital: Switzerland or Yemen? | Crisis is Literal Kiss of Death | Qatar’s Slave Trade Death Toll | Lew’s Illusions | Wal-Mart: Unpatriotic or Lying Through Their Teeth? | Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History? | Obama’s Corporate Grand Bargain Death of the Dollar | Joseph Stiglitz was Right: Suicide | China Injects Cash in Bid to Improve Liquidity

Technical Analysis: 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/~3/7UW0gxC1XhY/story01.htm Pivotfarm

 

I have a business I would like to sell you.

 

Let’s run over the numbers first.

 

First and foremost, I have to be honest, this business has not implemented a budget in five years. I know that seems like an insane way to run a business, but I can assure you that management is comprised of highly intelligent, ethical people.

 

These folks would never take advantage of shareholders. They’re all highly educated. And their corporate presentations and conference calls are extremely well written. Trust me, they know what they’re doing.

 

Having said that I also need to disclose that this business hasn’t been growing much at all. Indeed, it hasn’t even maintained annual growth of 3% in the last five years. On top of this, management has been caught fudging the company’s financials by several outside auditors. An honest assessment of its topline shows zero growth for the last few years.

 

I know I mentioned before that management are highly ethical. I can assure you they have a good reason to overstate their growth numbers: if the numbers reflected reality, they’d all be fired! We can’t have that can we? So they just “massage” things a bit to make the company’s growth look better than it is and to downplay the rise in costs that are squeezing its margins.

 

Speaking of which, this company isn’t profitable. In fact, it hasn’t been profitable for five years… actually it has only been profitable a few years out of the last five decades. And those years were “profitable” based on some really massaged numbers.

 

I know this sounds strange, but those honest folks in management think the best means for this company to grow is to spend way more than the company makes in its topline revenues. Sounds weird, I know. But again, these are very intelligent and ethical people. And none of the analysts covering the company ever ask about this. So what’s the problem?

 

Oh, and I almost forgot, the company has debt. A lot of it. Currently its debt is running north of 100% of its total market cap. Of course, this is based on some unusual accounting practices. If this company actually followed GAAP accounting rule for its pension expenses its debt load if over 400% of its market cap.

 

So, would you like to buy this business? How much would you pay for it?

 

I understand, you’d like to do some more due diligence. Ok, I’ll give you its stock symbol. Do you have a pen and paper ready? Ok, the stock symbol is:

 

USA.

 

For a FREE Special Report outlining how to protect your portfolio a market collapse, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards,

 

Phoenix Capital Research

 

 

 

 

 

 

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/t78QIXtuu78/story01.htm Phoenix Capital Research

In a dramatic change of events that is a) sure to not win the administration any goodwill point with the citizens of the free, or enslaved, world or their insolvent leaders so desperately reliant on the US for day to day funding, and b) will confirm the state of complete policy chaos that is at the core of the Obama administration’s handling of the ObamaPhone spygate (where for some reason the fact that the US spied on foreigners, as it should, has taken far more precedence over the NSA intercepting and recording each and every domestic communication, with neither checks nor balances), the earlier reported news originating from the Chair of the Senate Intelligence Committee Dianne Feinstein, who said that “the White House has informed me that collection on our allies will not continue, which I support” was a fabrication.

Instead, as The Hill reported shortly thereafter,  “A senior administration official on Monday rejected Intelligence Committee Chairwoman Diane Feinstein’s claim that the U.S. has halted intelligence collection against its allies. In a statement released earlier Monday, the California Democrat said that the White House “has informed me that collection on our allies will not continue.”  But the administration official called that statement “not accurate.” In other words, the situation surrounding Obama’s global Watergate hotel, has devolved to a state where the executive and the Chair of the Legislative’s intelligence committee are not even able to communicate in order to get their story straight about lying what the US will and won’t do in the future. Because, needless to say, any promise that the US won’t do what it obviously will continue doing as there is absolutely no downside to doing so, is merely the latest lie in long and illustrious chain of seasonally adjusted truths.

From The Hill:

“While we have made some individual changes, which I cannot detail, we have not made across the board changes in policy like, for example, terminating intelligence collection that might be aimed at all allies,” the administration official said.

And then the confusion and backtracking began:

After the administration’s statement, a spokesman for Feinstein clarified that the senator intended to say that the U.S. was ceasing “collection on foreign allied leaders.”

 

Feinstein also said that it was her understanding President Obama “was not aware” the U.S. had been monitoring the cellphone of German Chancellor Angela Merkel. The Wall Street Journal reported Sunday that Obama first learned of the program, which apparently began in 2002, during an internal audit of intelligence practices this summer.

Why do we know Obama is “not” lying? Because he had no comment.

In an interview Monday afternoon with Fusion, the president refused to comment when asked about when he became aware of the surveillance.

What we do know, is that Obama no longer has a direct feed to Merkel’s cell phone. Whatever that means:

The administration has announced at least one determination, however. White House press secretary Jay Carney said last week that Obama assured Merkel in a private phone conversation that the administration was not currently monitoring her cell phone, nor would they do so in the future.

All the BS aside, in retrospect if indeed the NSA, being a government agency, does its job with the “efficiency” with which the government makes up lies on the fly, then there is absolutely nothing to worry about. For either the allies of the US, as long as that special status continues, or the billions of electronic communications intercepted among US citizens each day.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/oKytwnbHVg4/story01.htm Tyler Durden