The Sum Does Not Equal The Parts: China Provincial GDP Signals Sharper Slowdown

First-quarter growth in almost all Chinese provinces was below their annual targets, according to local media, with the most concerning data from resource-dependent and manufacturing-heavy provinces suffered the sharpest economic slowdown in the first quarter as the government pushed to tackle excessive factory capacity and pollution. As Reuters reports, the fastest growth regions are Chongqing, Guizhou and Tianjin and all saw growth drop significantly. Specific provinces affected by the government’s reforms include Inner Mongolia, which provides one third of the coal supply in the country, saw GDP growth drop to 7.3% in Q1 from 9.9% a year earlier; Shanxi, a major coal producing province, which saw growth tumble to to only 5.5%; and Hebei province, the nation’s top steel producer, collapsed to only 4.2% in the first quarter of 2014 from 8.2% in the previous quarter. It seems the sum of the parts is anything but the same as the whole.


As Reuters reports, China’s resource-dependent and manufacturing-heavy provinces suffered the sharpest economic slowdown in the first quarter as the government pushed to tackle excessive factory capacity and pollution, official data showed.

First-quarter growth in almost all Chinese provinces was below their annual targets, according to local media.



Growth in China’s less developed western and central provinces have consistently outpaced that of more affluent eastern regions in recent years, but the latest data showed the gap is narrowing as the former saw growth slowing more quickly.

However, it’s entirely unclear still what the real numbers are…

The combined economic output of China’s provinces has long exceeded that of the national level compiled by the National Bureau of Statistics, raising suspicion that some growth-obsessed local officials have cooked the books.


Analysts at Bank of America/Merrill Lynch estimated that weighted average of provincial real GDP growth rate in the first quarter was 8 percent, down from 9.5 percent in 2013.


Chinese leaders have recently set new standards for local officials, stressing that their performance cannot be simply based on regional growth rates, but should include resource and environmental costs, debt levels and work safety.

So if these are the ‘locally’ reported data – and they are this bad – just how bad is the growth? And just how bad has it been for years as perhaps this is the normalization to reality that so many China realists have been expecting (and China bulls denying).

via Zero Hedge Tyler Durden

Elliott’s Paul Singer On How It All Will End: “Badly, We Guess”

Some less than pleasant observations from the billionaire founder of Elliott Management, Paul Singer, extracted from his periodic letter to clients.


The budget deficit for the latest fiscal year (which ended on September 30) was reported to be around $700 billion. However, this figure would be many times higher if the government’s unfunded entitlement programs were included. Even before taking into account liabilities stemming from the Affordable Care Act (ACA), which cannot even be calculated yet because so many of its assumptions are either erroneous or outright fabrications, and because many of its provisions keep getting delayed by the Administration for purposes of political advantage, the present value of the future obligations of the federal government is currently around $92 trillion. These obligations have been growing by over 10% per year since 2000, during which time nominal GDP has risen just 3.8% per year. At this rate, the federal government will owe an estimated $200 trillion on the entitlement programs by 2021 (again, excluding the effects of ACA) and $300 trillion by 2025.

These numbers are not fantasies. At present, there is no acknowledgement by a large portion of the American political establishment that this insolvency even exists. Nor have the leaders of this establishment made any concrete progress toward restoring solvency by taking up serious proposals to rein in unpayable promises. Quite the contrary: Politicians and policymakers continually tell people that such entitlement obligations will be met – a claim they must know cannot possibly be true.

Recently, we had a conversation with a mainstream economist who told us that the government is not actually insolvent because the long-term entitlements are not really liabilities that need to be counted, any more than the military budget for the year 2030 needs to be counted. This assertion is incorrect. Military spending, like any other form of discretionary spending, can be cut quickly and arbitrarily, as Washington recently made clear. And such spending is in exchange for goods and services delivered at the time the money is spent. In 2030, the government can buy many more tanks, or many fewer, than it is buying today. It has not promised to buy any amount. In fact, aside from military entitlements such as veterans’ health care, there is no obligation to spend any money at all on the military in 2030. By contrast, entitlements represent concrete governmental promises that are being made today about future spending – promises on which people are being (falsely) told that they can rely. And at the time the money is scheduled to be delivered, the recipient is delivering no goods or services. Only someone who has never run a business could say with a straight face that such obligations are not really liabilities and need not be included in the accounting.

High inflation (or hyperinflation) is one way that devious or clueless policymakers attempt to deal with unpayable promises. It is devious, because without formally imposing a tax, it takes money from savers and investors and pays it to borrowers and voters. It is clueless, because the cycle of government handouts and demands for more benefits is like a game of “chase the tail” – because it dissipates the real value of promised benefits, it brings the ultimate prize no closer while destroying the value of money and dissolving societal cohesion in the process.

The U.S. is in a “warm-up” phase on this score at present. The promises made by U.S. politicians are huge. Absent reform, they will lead to societal ruin. But so far, there has been no collapse of the dollar – possibly because there is no alternative fiat currency against which it can collapse. Gold is trading at $1,300 per ounce, not $5,000 per ounce. The $100 million co-op apartment in New York and the £100 million flat in London are thought of as oddities, not “coming attractions” for the evaporation of the value of paper money. Wage inflation is small (even though labor markets for desirable skills are tighter than most people think), and the arithmetic of government statistics (jobs, growth and inflation) is distorted and dishonest almost beyond measure.

There is something missing in investors’ reasoning that leads to their current complacency, and that is an understanding of the circularity of confidence in a fragile system. Since the system is fundamentally unsound, all it would take is a loss of confidence to set off a collapse in the purchasing power of money, a major currency or the global stock and/or bond markets. “Risk off” today still means buying U.S. Treasuries, but this may not be the case at some unpredictable but abrupt future turning point in market psychology. Markets are fast and self-reinforcing today, creating facts rather than reflecting them. We believe investor confidence today is unjustified. The leaders of the Developed World have chipped away at the solidity that would ordinarily justify confidence in their leadership, markets and currencies, such that confidence can be lost at any moment. If confidence in a sound system is unfairly lost, then countertrend forces can act to stem the panic and restore stability. But a justified loss of confidence in an unsound system would generate much more damage and be, for a period of time and price, unstoppable. That result is what governments have risked by their poor policies, their lack of attention to the risks posed by the inventions of the modern financial system, and their neglect of the fiscal balance sheet. Since this combination is relatively new, particularly the enormity of Developed World debt and obligations, as well as the complexity and extraordinarily high leverage of the financial system (especially given the size of derivatives books), there is no way to tell exactly how it all will end. Badly, we guess.

* * *


For those who did not recognize the above formula, you are in good company. It is the equation showing that kinetic energy is a function of mass and velocity, but that the relationship is not linear: A doubling of velocity causes a quadrupling of kinetic energy.

What is the relevance to financial markets and trading? We believe some of the same elements are present when financial leverage rises beyond certain levels. Any complex portfolio contains expectations about maximum expected price movements and possible losses, together with assumptions about the dispersion of returns and correlation. Obviously when markets turn adverse, if those assumptions turn out to be overly optimistic, then losses ensue. Capital represents a cushion against losses, a cushion that is very important to the investor, but even more important to the system as a whole. When leverage goes up, it takes smaller and smaller perturbations in prices, correlations and volatility to generate serious losses requiring palliative action. But as leverage increases among key market players, the possibility of large losses and involuntary liquidation behavior creates contagion from one player to another, a kind of chain-reaction effect as losses occur too quickly for reflection and sellers become price-insensitive, causing larger losses – and even failure – to spread from one firm to another. Extreme leverage removes the cushion and the robustness of structure, and it is the proximate cause of disequilibrium. As with kinetic energy, excessive leverage is nonlinear, subject to tipping points, and can cause (and did cause in 2008) massive and abrupt systemic failure.

This nonlinearity of leverage is a function of similar positioning and contagion. We do not believe that the system today is any safer than it was when it failed in 2007 and 2008. Global leverage is up, not down, contrary to the popular misconception. Private debt is unchanged from 2007 levels, but public debt has risen globally from $70 trillion to $100 trillion. It appears that a number of major American financial institutions have de-risked  themselves somewhat, although this is impossible to discern from publicly available filings (which is why rumor and conjecture will govern the way markets perceive large financial institutions in the next market crisis). European financial institutions still maintain more leverage and bigger derivatives books than their American counterparts, as well as large holdings of sovereign debt that they were coerced into buying as part of the “save-the-euro” panic.

In fact, the global financial system is arguably less safe than it was in 2008. The unquestioned creditworthiness of the Developed World governments ended the most intense phase of the 2008 crisis, as the financial system was ultimately all but guaranteed by governments. A catalyzing force for the next crisis might be a failure of confidence in one or more of those major governments or in China. Such a failure alone could cause major stress in markets, as either currencies or bond markets could experience sudden collapses. Also potentially impactful is one of the major lessons of 2008: It is wise to move assets and sell claims and securities immediately if a debtor or counterparty is perceived to be in trouble. This maxim could make the next market crisis play out on a hair-trigger, with a stressful lead-in and then a simultaneous rush to the exits.

Those who think the scenario above is an exaggeration should ask themselves the following question: After decades of advancements in human knowledge and purported innovations in the global financial system, why did 2008 turn into the worst financial crisis since the Great Depression? The answer is that the system was unsound, largely due to excessive leverage and the complexity of financial instruments. In the 80-plus years since the 1929 crash and the subsequent Depression, there clearly have been a large number of geopolitical and financial events, yet none of them caused financial collapse until 2008. Of course, we understand that a combination of public and private errors and misconceptions led to the financial crisis, but it was the unfettered use of leverage that made the episode pass over the line into systemic collapse.

We do not think policymakers have learned anything much from the financial crisis, but that fact can truly be demonstrated only as time passes. In our view, monetary policy extremism has papered over (no pun intended) the lack of fundamental reforms that would enable the Developed World to grow faster and more sustainably with financial institutions that are solid and robust enough to withstand the next periods of economic and financial stress. We believe the world’s financial institutions are still essentially dependent on governments, but the Developed World governments themselves are hopelessly insolvent. The insolvency may not be manifested in a market reaction tomorrow or even next year, but the numbers are obvious and compelling, not conjectural or  fanciful. Markets focus on something when they want to, not when “visionaries” think they should.

It is important to note that mass human behavior cannot be modeled or predicted with any degree of precision. When forces are brought to bear that suggest a possible shift in direction of mass human behavior (examples include oppression, tyranny, economic underperformance, inflation, incentives and disincentives), there is no way of telling if, how or when such forces will actually result in a change of vector.

via Zero Hedge Tyler Durden

A mortuary of 7,000,000 foreclosures and counting

If a foreclosure happens in the wilderness, does it make a sound? It seems like people have conveniently forgotten that since the housing crisis hit we have witnessed more than 7,000,000+ foreclosures. Do you think these people believe the Fed is almighty and can stop a speeding train or turn water into wine? Apparently some people forget that the Fed failed to prevent the tech bust or the housing bust in the first place. Now, the Fed is somehow the cult leader and the leader will not let housing values fall. The nation still has 9.1 million seriously underwater homeowners on top of the more than 7 million that have gone through foreclosure. It is abundantly clear that the mindless drivel of “buying is always a good decision” is just that. Investors are starting to pull back in expensive states because value is harder to find. I see the lemmings at open houses and you can see the drool at the side of their mouths hoping for a morsel of real estate. The Fed, for better or worse, has turned us all into speculators. Simply putting your money in a bank is a losing battle because inflation is eroding your buying power. Yet wages are not keeping up. What you have is people competing with investors, foreign money, and a market with low inventory and trying to guess the next move from the Fed. Yet the tech bust and housing crash (keep in mind these happened only since 2000) were major events not prevented by the Fed.


Does buying today make sense?

The big question for many is whether buying today makes sense. Hopefully the 7 million foreclosures within the last decade highlights that housing isn’t always a simple buying decision. Investors have been dominant in the market since 2009. Big money is clearly pulling back from inflated markets like those in California. This trend is fairly new but even with this minor twist, inventory is picking up and sales are still very low.

It helps to understand that many foreclosures are happening because people are spread thin. People are still maxed out. Unlike big banks with sophisticated deals and systems in place, most households are living paycheck to paycheck even those with higher incomes. First, take a look at some foreclosure history:


Print this chart out and just remember that housing is a big freaking purchase. Probably the biggest you will ever make. Just because someone is house horny doesn’t mean they should act on it. What fascinates me is that late in 2012, most of those in the housing industry failed to see the big run-up in prices for 2013. Most were predicting 2 to 5 percent price gains. Instead, we saw double-digit gains. At the end of 2013, the predictions were incredibly optimistic for 2014.

If the trend is so obvious and clear, why do we see low volume in housing sales?

existing home sales

Existing home sales are down more than 35 percent from their peak reached in 2006. Our population is growing and prices are going up. Yet the push for higher prices has come from Wall Street, low rates, and normal buyers competing with the investor group. A big question that many are wondering is what will happen when big money starts to flow out of real estate. We are starting to find out slowly. Rates are also likely to go up – so for those that believe the almighty Fed can do anything they should listen to their leader that is utterly telling the market rates will go in one direction.

What we don’t have to guess on is that this recent trend has made it tougher for first time buyers:


First-time home buyers are a small portion of the market today because of investors crowding them out. We also have a large number of young ones living in the basement of their parent’s granite countertop sarcophagus.

Still underwater

Despite the recent rise in home prices we still have 9.1 million home owners seriously underwater. What this tells us is that many people pushed their budgets to the financial limits merely to squeeze in. If this were truly a solid housing uptrend we would be seeing home builders doing what they do, building homes. We would also see existing home sales kicking butt. Yet we have a juiced up system with countless forms of accounting shenanigans. Some try to make it out as if economics and finance are somehow a new science. Unlike Newtonian physics on Earth, the Fed can act like a deus ex machina and literally change the rules for a brief period of time. And people are emotional and the reptilian part of our brain goes haywire when you talk about the “nest” – you need only go to an open house to see the house horny folks battle it out.

We’ve been adding many more rental households over the last few years, just in line with the big investor buying (those 7 million foreclosures have to move somewhere but foreclosures are also slowing down):



What is telling about this chart is that we have never had a sustained period of actually losing home owner households since, well this last crisis. Why? Take a look at the graveyard of 7,000,000 foreclosures. The Fed has turned the housing market into a speculative vehicle and with this volume of investor buying, you should proceed with the caution of buying a stock. This is another critical point here in regards to perceived risk. You have people staying miles away from stocks (which are up 170+ percent since 2009) yet are more than willing to stuff their entire $100,000 or $200,000 down payment into a highly priced piece of property that just went up by double-digits courtesy of investor fever. Yet they feel this is safer! California was a big chunk of the 7,000,000 foreclosures folks. You have people with pathetic 401ks and retirement funds yet 80 to 90 percent of their wealth tied up in one piece of real estate.

7 million foreclosures and currently 9.1 million seriously underwater home owners. It should be apparent that when it comes to buying a house, you really need to run the numbers. Investors have and they are pulling back from certain markets.

Did You Enjoy The Post? Subscribe to Dr. Housing Bubble’s Blog to get updated housing commentary, analysis, and information.

via Zero Hedge drhousingbubble

The Real Unemployment Rate: In 20% Of American Families, Everyone Is Unemployed

Submitted by Michael Snyder of The American Dream blog,

According to shocking new numbers that were just released by the Bureau of Labor Statistics, 20 percent of American families do not have a single person that is working.  So when someone tries to tell you that the unemployment rate in the United States is about 7 percent, you should just laugh.  One-fifth of the families in the entire country do not have a single member with a job.  That is absolutely astonishing.  How can a family survive if nobody is making any money?  Well, the answer to that question is actually quite easy.  There is a reason why government dependence has reached epidemic levels in the United States.  Without enough jobs, tens of millions of additional Americans have been forced to reach out to the government for help.  At this point, if you can believe it, the number of Americans getting money or benefits from the federal government each month exceeds the number of full-time workers in the private sector by more than 60 million.

When I was growing up, it seemed like anyone that was willing to work hard could find a good paying job.  But now that has all changed.  At this point, 20 percent of all the families in the entire country do not have a single member that has a job.  That includes fathers, mothers and children.  The following is how broke down the numbers…

A family, as defined by the BLS, is a group of two or more people who live together and who are related by birth, adoption or marriage. In 2013, there were 80,445,000 families in the United States and in 16,127,000—or 20 percent–no one had a job.

To be honest, these really are Great Depression-type numbers.  But over the years “unemployment” has been redefined so many times that it doesn’t mean the same thing that it once did.  The government tells us that the official unemployment rate is about 7 percent, but that number is almost meaningless at this point.

A number that I find much more useful is the employment-population ratio.  According to the employment-population ratio, the percentage of working age Americans that actually have a job has been below 59 percent for more than four years in a row…

Employment Population Ratio 2014

That means that more than 41 percent of all working age Americans do not have a job.

When people can’t take care of themselves, it becomes necessary for the government to take care of them.  And what we have seen in recent years is government dependence soar to unprecedented levels.  In fact, welfare spending and entitlement payments now make up 69 percent of the entire federal budget.  For much more on this, please see my previous article entitled “18 Stats That Prove That Government Dependence Has Reached Epidemic Levels“.

And what is even more frightening is that more families are falling out of the middle class every single day.  As a recent CNN article explained, approximately one-third of all U.S. households are living “hand-to-mouth”.  In other words, they are constantly living on the edge of financial disaster…

About one-third of American households live “hand-to-mouth,” meaning that they spend all their paychecks. But what surprised the study authors is that 66% of these families are middle class, with a median income of $41,000. While they don’t have liquid assets, such as savings accounts or mutual fund holdings, they do have homes and retirement accounts, with a median net worth of $41,000.

“We don’t expect them to be living paycheck to paycheck,” said Greg Kaplan, study co-author and assistant professor of economics at Princeton University.

The American Dream is rapidly becoming an American nightmare.

When I was growing up, I lived in a pretty typical middle class neighborhood.  Everyone had a nice home, a couple of cars and could go on vacation during the summer.  I don’t remember ever hearing of anyone using food stamps or going to a food bank.  In fact, I can’t even remember anyone having a parent that was unemployed.  If someone did leave a job, it was usually quite easy to find another one.

But today, the middle class is being ripped to shreds and according to one new report there are 49 million Americans that are dealing with food insecurity in 2014.

How can anyone not see what is happening to us?  America is in the midst of a long-term economic decline, but the mainstream media and most of our politicians seem to think that things are better than ever.  They continue to try to convince us that “business as usual” is the right path to take.

But one-fifth of the families in the entire nation are already totally unemployed.

At what point will we finally admit that what we are doing right now is simply not working?

30 percent of all families unemployed?

40 percent?

50 percent?

If we stay on the road that we are on now, things are going to continue to get worse.  Millions more jobs will be shipped overseas, millions more jobs will be replaced by technology and crippling government regulations will kill millions more jobs.  The middle class will continue to shrink and government dependence will continue to rise.

Most people just want to work hard, put food on the table, pay their mortgages and provide a nice life for their families.

But the percentage of Americans that are successfully able to do that just keeps getting smaller.

Wake up America.

Your middle class is dying.

via Zero Hedge Tyler Durden

Tonight on The Independents: Silver Bans Sterling, Kyle Smith Pokes Piketty, Brian Lamb on Gubmint Transparency, You Vote for Second Panel Topic, Plus Scenes From the Vape-in & Steamy After-Show!

Bro wasn't having it. |||Tonight’s live episode of The
(Fox Business Network, 9 p.m. ET, 6 p.m. PT)
will include the following elements:

* Debate over the propriety of the
NBA’s lifetime ban
of Donald Sterling for saying wacky racist
stuff in a private conversation, featuring Party Panelists Charles W. Cooke
(National Review) and Julie Roginsky (Fox News).
Those two will be back later, debating a topic of your choice (via
Islamic insurgents surrounding Baghdad, or Louis C.K
slamming Common Core.

* New York Post movie reviewer/columnist Kyle Smith
talking about his funny piece calling Thomas Piketty’s
Capital in the Twenty-First Century
 “’50 Shades of
Grey'” for the Acela-corridor professional intellectual
statist.”(Read Garett Jones’s Reason review here.)

* Some video scenes and discussion about last night’s fab


* An interview with American hero
Brian Lamb
, founder of C-SPAN.

* Some discussion from co-host Kmele Foster about President
Barack Obama’s recent defenses of his foreign policy record.

* Sexy after-show, which you can find at
at 10 p.m. sharp. Aforementioned Facebook page is at;
follow on Twitter @ independentsFBN, and
click on this page
for video of past segments.

from Hit & Run

No Spaghetti For You: Venezuela Noodle Maker Halts Production Due To Lack Of Dollars

Despite the endless claims by Maduro and his merry men that the new-and-improved SICAD II anti-hyperinflation FX allocation system is working well, it seems it is anything but…


The firm, which produces multiple pasta products, has been forced to 'suspend' operations due to a lack of raw materials (wheat) because it has no foreign currency to use for settlement. Polar says it is working with authorities to find a solution.

As Bloomberg reports,

Venezuela’s Empresas Polar has temporarily halted pasta production at its plant in Maracaibo because of delays in obtaining foreign currency from Cencoex to import wheat, the company said today in an e-mailed statement.


Operations at the plant, which makes the Primor and Gran Senora brands of pasta, stopped on April 27 after inventory that had been loaned from other companies ran out


Polar says its working with government to find solutions to import wheat

And the full statement from Empresas Polar:

Polar Foods plant in Maracaibo Commercial, which produces the brand pasta Primor and Great Lady , was forced to temporarily suspend its operations due to the delay in the settlement of foreign currency by Cencoex (formerly Cadivi) for the purchase of wheat durum, imported raw material required for the manufacture of pasta.


Operations were halted on Sunday April 27, after wheat inventories were obtained through loans from other companies were sold.


As this is a case of force majeure attributable to the company, the procedure for waiver of the employment relationship with the plant workers agreed, as stated in Article 72 of the Labor Law, the Workers and Workers.


The situation is known to the national authorities, who have held numerous communications and meetings, which were alerted in a timely and responsible manner on the risks of delayed settlement currency for the payment of debt suppliers and their effects on the production of an item that is part of the staple diet of Venezuelans.


Polar Enterprises continues to work with the authorities in the search for solutions to obtain in a timely manner, the raw material to restart production as soon as possible Pasta of Primor and Great Lady.

So no toilet paper and now no pasta… how's that whole socialism thing working out? We await Maduro to proclaim them a national treasure and allocate funds accordingly – lik ethe oil companies – or… call them speculators for not having enough dollars and throw the executives in jail.

via Zero Hedge Tyler Durden

Scenes From Last Night’s Vape-in

Dan Gluck, American hero. ||| ABC NewsLast evening, Reason co-sponsored an
event at New York’s great Museum of Sex titled “Thank
You for Vaping
,” in which foes of the nanny state lit up
electronic cigarettes (filled with all sorts of material!)
in defiance of the Big Apple’s new vaping ban. It was a swell time,
as perusal of the press coverage can attest.

ABC News

More than 300 e-smokers showed up for a “vape-in” at Manhattan’s
Museum of Sex Monday night to protest a New York City ban on indoor
e-cigarette smoking. They thumbed their noses at e-cigarette
prohibitionists by dancing and vaping the night away until well
past midnight, when the ban went into effect. […]

Tara Lober, a 21-year-old from Brooklyn who attended the event,
said she thinks the ban is silly.

“This is a health issue, yes, but I see it as closer to a civil
rights issue,” Lober said[.].


America's favorite asshole! ||| NewsweekThe scene might have been mistaken for a pickup
spot—there were more than 100 bodies loose with booze, many toking
on hookah-looking things. But those present consisted of vapers,
what users of e-cigarettes and higher-tech nicotine-vaporizing
devices call themselves, and they gathered to protest the city’s
indoor e-cig ban that took effect at midnight—by continuing to vape
after 12 a.m. […]

One such vaper is Will Gallagher, a 20-year-old photography
student who had a cigarette habit until he got into vaping.

“They make this out to be a bad thing when there really isn’t a
lot of information,” he said of anti-vaping efforts. “It’s really
been a shoot first, ask questions later situation.”

And, compared with smoking, “it’s a much healthier thing,” he
added. […]

Vice magazine co-founder Gavin McInnes helped lead
the countdown from five before midnight, which was followed by
shouts of “Illegal smoking, woo!” and “Outlaw!” as vapers breathed

When Newsweek asked McInnes what brought him
to the vape-in, he said he didn’t vape or smoke but was “always a

Sessy! ||| The VergeVice:

If SoHo’s
swanky Henley Vaporium
 was a sign that the vape scene has
come out from underground and is penetrating the mainstream, last
night’s event seals the deal. (Henley founder Talia Eisenberg was
there donning a “Fuck Big Tobacco” shirt.) Attendees mingled with
glasses of wine and High Life, in a darkly lit venue strewn
with Playboy magazines and a DJ mixing next to
the cocktail bar.

It felt more like a fancy club than political protest, but the
message was clear: get your hands off our vapes. If not for the
benefit of the public health, than for the nascent industry
attempting to distance itself from the toxic habit that society has
been trying to kick for decades.

The Verge

Not so sessy. ||| The VergeInside, a diverse crowd of punks, 9-to-5-types,
white hairs, 20-somethings, Army veterans, and artists puffed on
nicotine vaporizers, the all-metallic devices that look like part
of a vacuum cleaner, and “cigalikes,” the smaller, cheaper sticks
that look like cigarettes and probably have glowing tips. The smell
of caramelized banana, Apple Jacks, and melon mixed in the air.

“This is the beginning. This is where this fight takes off,”
says Jenee Fowler, a thin woman with multicolored hair also known
as Vape
 on YouTube. Fowler’s boyfriend Russ Wishtart, a
vaping advocate who hosts a libertarian-themed podcast, recently
joined a smoker’s rights group in a lawsuit
against New York City
 over the vaping ban.

Fowler is a former smoker, like many of tonight’s attendees. She
quit after she started using an electronic inhaler that vaporizes a
nicotine solution in order to simulate the effects of smoking. Like
many of tonight’s attendees, she feels the e-cig ban is

“We were forced to be smokers because we were addicted,” she
says, taking a hit of something called “freckle-faced dragonberry.”
“Now we finally have our lives back.”

Would she be observing the new rules that ban
 in restaurants, bars, schools, within 15 feet of a
hospital door, “public arenas where bingo is played,” and so

No, she says. “I am going to vape everywhere.” […]

McInnes was wearing the “College” shirt from the
movie Animal House, which he said he had just
watched. “We don’t care if de Blasio puts us on double secret
probation,” he said. “We are going to release water vapors into the
sky, because that doesn’t hurt anybody.”

“Five, four, three, two, one,” the crowd counted down. “I’m
breaking the law!” one man yelled, holding his e-cig in the air.
“We’re all breaking the law!” someone else yelled.

The police never came.

The Verge has a photo essay of the event
. The
will have some video from the event tonight
at 9 p.m. ET on Fox Business Network.

from Hit & Run

Japanese Manufacturing PMI Collapses At Fastest Pace On Record; Drops To 14 Month Lows

Not much to add to this total and utter disaster… Markit’s Japan Manufacturing PMI plunged from 53.9 to 49.4 – it’s first contractionary print since Feb 2013 and its biggest MoM drop on record. Under the surface the picture is just as bad with output falling at the fastest pace since December 2012 and New orders also down. The blame for all this – the tax hike… hhm (well, it’s better than the weather we guess). Both prices charged and input prices rose in April with some panellists attributing inflation to an increase in raw material prices (stunned?). And if you think this terrible news is great news (because more QQE), forget it – Kuroda already say no and inflation is near the BoJ’s target.



Chart: Bloomberg

via Zero Hedge Tyler Durden

Ron Paul Redux: Warns Against Arming Land Management Officials In 1997

Via The Economic Noise blog,

Speaking on the House of Representatives floor on September 17, 1997, then-Rep. Ron Paul warned of the “massive buildup of a virtual army of armed regulators.”

Paul, the chairman and founder of The Ron Paul Institute, proceeded to comment in his speech that, with the number of armed federal employees approaching 60,000, the Secretary of the Interior was pushing for even the Bureau of Land Management to be armed.

With the continuing rise of SWAT over the following 16 years, the number of armed US government employees continued to grow.

According to the bulletin – Federal Law Enforcement Officers, 2008 of the Bureau of Justice Statistics – by September of 2008 “federal agencies employed approximately 120,000 full-time law enforcement officers who were authorized to make arrests and carry firearms in the United States,” with 255 of them working for BLM.

We saw the United States government’s armed agents in action recently at the Bundy ranch in Nevada. We also saw them back off, at least for now, when confronted by armed protestors. Paul’s concluding sentences of his 1997 speech seem apropos:

“The gun in the hands of law-abiding citizens serves to hold in check arrogant and aggressive government. Guns in the hands of the bureaucrats do the opposite. The founders of this country fully understood this fact.”

via Zero Hedge Tyler Durden