Tag: news

“My One-Item Christmas List: A Government That Stops Playing Santa”

I’ve got a
new column up at Time’s Ideas section. Here’s the opening:

Forget a new car, Beats by Dre, or even affordable health care. You know
what I really, really, really want for Christmas?

I want a government that spends less money. I’m not alone in
such a wish. Even President Obama, who has asked for more and more
spending in each of his annual budget proposals, has called the
nation’s long-term spending patterns “unsustainable.”

We should be cutting small-ticket, medium-ticket, and big-ticket
items, and we can do it in a way that doesn’t kick out Tiny Tim’s
crutches or leaves us open to terrorist attacks. But first we need
to understand the magnitude of the growth in spending over the past
10 years.

In 2003, the federal government shelled out about $2.2 trillion
in nominal dollars. In 2013, it spent about $3.5
trillion. I have trouble figuring out exactly where that extra
$1.3 trillion a year is going, but I do know that whatever money is
spent by the generous souls in Washington, D.C. isn’t
printed by elves. It comes from current and future taxes that you
and I—or our children and grandchildren—will pay. According to the
Congressional Budget Office (CBO) projections for the next 25 years,
the government will never come close to matching outlays with
revenues (which CBO already assumes will be significantly higher
than the historical average for the past 40 years).

So the only path to sustainability is to cut spending. But where
to cut?


Please read the whole thing.

from Hit & Run http://reason.com/blog/2013/12/24/my-one-item-christmas-list-a-government
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What Bubble: Average New Home Sale Price Rises To All Time High

All one can say following the latest New Home Sales data release is that “baffle with BS” mode is fully engaged. First, following the release of the “revised” seasonally adjusted New Home Sales data, we learned that homebuilders somehow sold an extra 88 thousand annualized homes in the months of September, October and November: the same months when the sellside and economist crew was screaming home sales would plunge due to the government shutdown…  just so there is a buffer when sales dropped and/or disappointed (because apparently nobody buys houses when the government isn’t around). Instead what happened was a massive 18% jump in New Home Sales in the month of October, when the US government was shut down for over half the month, and the final print was 474K sales, the highest since July 2007. So much for that particular red herring.

 

But where things get outright bizarre, is when one looks at the series showing the average sales price for New Homes. Keep in mind that an hour ago we showed that mortgage applications have tumbled to a fresh 13 year low, while refi apps slid to the lowest in 5 years. So what happened to the average new home sales price in the month of November? Well, it just hit a new all time high! Why, because why it can.

And… #Ref!


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/WteT6U5Khao/story01.htm Tyler Durden

President Obama's Executive Order Raises Government Worker Salaries By 1%

As the non-government worker ‘slaves’ away, working 80 hours straight at Toys’r’Us, or earning an ‘unlivable’ wage at McDonalds, President Obama as used an executive order to activate a 1% pay raise for all government workers. As the WSJ reports, the 4.4 milion federal employees are receiving their first across-the-board pay bump since a 2% increase in January 2010 (though notably agency directors must meet this cost within their existing budgets – not collecting any new funds to pay for it). Of course, even by government statistical standards, this is still not keeping up with inflation, but hey, it’s better than nothing.

 

Via WSJ,

Federal employees in January will get their first across-the-board pay raise in several years, as President Barack Obama moved Monday to activate a 1% increase for all government workers.

 

The increase came by an executive order and was expected. The raise was requested by the White House earlier in the year and Congress didn’t take the necessary steps to prevent it from taking place.

 

…

 

The Obama administration in previous years agreed to freeze the pay of federal employees as part of the ongoing deficit-reduction fights in Congress.

 

It’s the first across-the-board pay bump for federal employees since federal employees received a 2% increase in January 2010. Federal employees were able to collect bonuses, overtime and promotion pay raises.

 

Federal agencies must accommodate the pay increases within their budgets and they do not collect additional funds because of Mr. Obama’s order.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KHLyGZ3tSO4/story01.htm Tyler Durden

President Obama’s Executive Order Raises Government Worker Salaries By 1%

As the non-government worker ‘slaves’ away, working 80 hours straight at Toys’r’Us, or earning an ‘unlivable’ wage at McDonalds, President Obama as used an executive order to activate a 1% pay raise for all government workers. As the WSJ reports, the 4.4 milion federal employees are receiving their first across-the-board pay bump since a 2% increase in January 2010 (though notably agency directors must meet this cost within their existing budgets – not collecting any new funds to pay for it). Of course, even by government statistical standards, this is still not keeping up with inflation, but hey, it’s better than nothing.

 

Via WSJ,

Federal employees in January will get their first across-the-board pay raise in several years, as President Barack Obama moved Monday to activate a 1% increase for all government workers.

 

The increase came by an executive order and was expected. The raise was requested by the White House earlier in the year and Congress didn’t take the necessary steps to prevent it from taking place.

 

…

 

The Obama administration in previous years agreed to freeze the pay of federal employees as part of the ongoing deficit-reduction fights in Congress.

 

It’s the first across-the-board pay bump for federal employees since federal employees received a 2% increase in January 2010. Federal employees were able to collect bonuses, overtime and promotion pay raises.

 

Federal agencies must accommodate the pay increases within their budgets and they do not collect additional funds because of Mr. Obama’s order.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/KHLyGZ3tSO4/story01.htm Tyler Durden

Washington Post Interview: Edward Snowden Defends the Constitution Against Clapper, Alexander, Feinstein, Rogers, and Obama

SnowdenObamaThe Washington Post is
running a terrific article in which former NSA contractor
Edward Snowden explains why he revealed how far the NSA and
other federal agencies had gone toward constructing a national
security surveillance state. Short answer: Because it’s
unconstitutional. The Post interviewed Snowden for 14
hours in Moscow and he comes off much better than the pack of liars
who run the NSA or the enablers who “oversee” its activities in
Congress or in the Administration.

And by liars, I mean Director of National Intelligence James
Clapper who lied to Congress
about the NSA’s bulk collection of data involving essentially every
American’s phone calls. By liars, I mean NSA Director
Keith Alexander, and Congressional Intelligence Committee
chairs
Sen. Dianne Feinstein (D-Calif.) and Rep. Mike
Rogers (R-Mich.) who all claimed that the massive phone
surveilance program was crucial to disrupting more than 50
terrorist attacks.

In June,
President Obama described the NSA’s bulk data collection as a
“circumscribed, narrow” program that thwarted at least 50 terror
threats. “Lives have been saved,” asserted the president.

All lies.

In fact, the new report from President’ Obama’s handpicked
review committee earlier this week flatly said that the NSA’s
dragnet spying program was “not
essential to preventing attacks” and that “there has been no
instance in which NSA could say with confidence that the outcome
[of a terror investigation] would have been any different” without
the program.

From the Post article:

“For me, in terms of personal satisfaction, the mission’s
already accomplished,” [Snowden] said. “I already won. As soon as
the journalists were able to work, everything that I had been
trying to do was validated. Because, remember, I didn’t want to
change society. I wanted to give society a chance to determine if
it should change itself.”

“All I wanted was for the public to be able to have a say in how
they are governed,” he said…

The pack of liars accuses Snowden of breaking his oath to the
NSA and calls him a traitor who
should be hanged.

“The oath of allegiance is not an oath of secrecy,” he said.
“That is an oath to the Constitution. That is the oath that I kept
that Keith Alexander and James Clapper did not.”

Correct. The Post further reports:

Snowden is an orderly thinker, with an engineer’s approach to
problem-solving. He had come to believe that a dangerous machine of
mass surveillance was growing unchecked. Closed-door oversight by
Congress and the Foreign Intelligence Surveillance Court was a
“graveyard of judgment,” he said, manipulated by the agency it was
supposed to keep in check. Classification rules erected walls to
prevent public debate.

Toppling those walls would be a spectacular act of transgression
against the norms that prevailed inside them. Someone would have to
bypass security, extract the secrets, make undetected contact with
journalists and provide them with enough proof to tell the
stories.

The NSA’s business is “information dominance,” the use of other
people’s secrets to shape events. At 29, Snowden upended the agency
on its own turf.

“You recognize that you’re going in blind, that there’s no
model,” Snowden said, acknowledging that he had no way to know
whether the public would share his views….

Six months ago, a reporter asked him by encrypted e-mail why
Americans would want the NSA to give up bulk data collection if
that would limit a useful intelligence tool.

“I believe the cost of frank public debate about the powers of
our government is less than the danger posed by allowing these
powers to continue growing in secret,” he replied, calling them “a
direct threat to democratic governance.”

In the Moscow interview, Snowden said, “What the government
wants is something they never had before,” adding: “They want total
awareness. The question is, is that something we should be
allowing?”

Snowden likened the NSA’s powers to those used by British
authorities in Colonial America, when “general warrants” allowed
for anyone to be searched. The FISA court, Snowden said, “is
authorizing general warrants for the entire country’s metadata.”
…

The difference with the NSA’s possession of the data, Snowden
said, is that government has the power to take away life or
freedom.

At the NSA, he said, “there are people in the office who joke
about, ‘We put warheads on foreheads.’ Twitter doesn’t put warheads
on foreheads.”

It is way the past time for Clapper and Alexander to be fired
and tried for lying to Congress and to the American people.
Congress should
act immediately on legislation to restore Fourth Amendment
protections against government agents spying on Americans.

The whole Post article is well worth your attention and
outrage.

I’ll say it again: Thank
you Edward Snowden.

from Hit & Run http://reason.com/blog/2013/12/24/edward-snowden-understands-constitution
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November Durable Goods Jump, Driven By Abnormal Seasonal Adjustments

As we have pounded the table for the past 2 years, the one most fundamental component of a self-sustaining, “escape velocity” US recovery has been the persistent absence of corporate spending and capital expenditures, as a result of a corporate mindset in which it is better to reward shareholders with short-term gains such as dividends and stock buybacks, than invest in the future via CapEx (or M&A). Which is why we were eagerly looking forward to today’s Durable Goods number as it provides the best read of how America’s corporations are gearing up for capital spending in terms of both orders (which can be cancelled at any time as Boeing so vividly remembers in the aftermath of the Lehman bankruptcy) and actual shipments. On the surface, the numbers were great, beating expectations across the board.

The full breakdown:

  • Headline Durable Goods including volatile transports were up 3.5%, beating expectations of a 2.0% rise, and up from an upward revised -0.7%.
  • The much more relevant and informative Durable Goods ex transports rose 1.2%, beating expectations of a 0.7% increase, and up from a downward revised -0.7%
  • On the pure CapEx front, Cap Goods orders non-defense exluding aircraft rose 4.5%, slamming expectations of a 0.7% increase, and up from an upward revised 0.7%
  • And finally, Cap Goods shipments non-defense ex aircraft rose 2.8%, on expectations of a 1.0% increase and up from a downward revised -0.4%.

Still, even with the current pick up, the trend needs to show some additional strength to breach the recent declining trendline as shown in the charts below, first that of Durable Goods, helped recently quite a bit by Boeing orders:

And certainly more needs to happen in the Durables ex aircraft:

 

As for actual shipped Capex, it is still trailing at the bottom:

Nonetheless. today’s news was great, and if one is so intent, one may be convinced that the CapEx recovery is just around the corner.

However, because there always is a but, here is the BUT.

November traditionally is a month in which the bulk of the increase is due to seasonal adjustments. This was no exception, with Not Seasonally Adjusted data declining substantially in every category: Durable Goods, both core and ex-trans, declined by 2.3% and 6.4% respectively, while core CapEx, Shipments and Orders, also dropped by 2.0% and 1.0% respectively.

So what’s the big deal: there are seasonal adjustments every year right. Of course, however the seasonal adjustments are there to revise the sequential changes, not the annual changes from a year ago. In other words, while the mover from October 2013 to November 2013 may be adjusted for seasonal variation, it is the move from November 2010 to November 2011 to November 2012 to November 2013 and so on, that should be virtually in line both adjusted and unadjusted.

Which is why it is odd that when we look at just this data for the Durable Goods ex transports, that we see avery curious Seasonal Adjustments aberation.

See if you can spot the difference in the chart below:

The chart above looks at the Year over Year change in Durables ex transports for the month of November across 4 different years. What immediately stands out is that while 2010 through 2012 acted just as expected, with SA and NSA data almost identical, in 2013 the data… diverged. In fact, the divergence between the SA and NSA was inexplicably over $2.2 billion. What does that mean? Well, if the SA number was accurate, and in line with what the NSA number predicted, Durables Goods ex-transports would have declined by -0.5% instead of rising by 1.2%. The same would apply to all other key categories from the report.

In other words, when all else fails, and when Unadjusted data points to a decline, just do what the government’s Arima X 12 model is so good at doing, and adjusted the data.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bswgJzYiKV4/story01.htm Tyler Durden

Mortgage Applications Down 66% From Highs To New 13-Year Low

From its peak in October 2012, mortgage applications have collapsed 66% and this week printed at new 13-year lows. Since rates started to crack on Taper talk in May 2013, mortgage applications have fallen in a one-way street (but hey, rising rates won’t affect the housing recovery, right? remember 15% mortgages… as the usual bullshit meme goes, entirely missing the shift in house prices, affordability, and marginal price-setter). Of course, the usual ‘seasonal’ effect wil be blamed and recovery will re-blossom in the new year… except, seasonally this is among the worse drop in the last few weeks of the year in the last decade. Adding further salt to the wound of wealth generation, the refi index has dropped to a fresh 5-year low as the home equity ATM remains shut (having dropped 73% in the last few months).

 

New 13-year low in mortgage applications…

 

and no – its not seasonals, its worse…

 

But hey, the Fed’s economic-confidence inspiring Taper will fix all this and housing will rise once again… on the shoulders of cheap money Wall Street landlords…

 

Charts: Bloomberg


    



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Retail Traffic Plunges By "Staggering" 21% In Week Before Christmas

That it has been one of the most lacklustre shopping seasons in recent years has already been repeatedly covered, with average holiday spending expected to decline for the first time since the Great Financial Crisis of 2008, all this despite record promotions and an ever earlier start to Black Friday.

Another chart showing the same trend from Bloomberg, with the comment that the “eroding middle class can no longer drive activity as it has in the past” – that’s odd: we said the same thing in late 2009 for which we got yet another label of tinfoil conspiracy theorists…

However, while the early start to shopping season has missed expectations, driven primarily by an unprecedented weakness in traditional bricks and mortar outlets, there was some hope that the last stretch into Christmas and the New Year would provide a much needed, last minute bump. Those hopes were dashed last night when Shopptertrack reported that retail traffic plummeted by an unprecedented 21% last week, and in-store sales decreased 3.1% from the year before, dashing retailers’ hopes that the final stretch before Christmas would offset soft sales numbers earlier in the holiday shopping season.

UT San Diego reports:

The disappointing numbers, released by ShopperTrak on Monday, are “kind of staggering,” said the research firm’s founder, Bill Martin, who last week voiced optimism that retailers would see a noticeable spike in traffic and sales the week of Dec. 16-22 after two consecutive weeks of decreases in both.

 

He attributed the latest nosedive to successful November promotions, and bad weather last week in the Midwest and other central states. An increase in virtual window-shopping has prevented consumers throughout the shopping season from setting foot in many stores to look, feel and compare prices, he added.

Wait, November promotions were successful? For whom: retailers whose bottom lines got crushed in the margin collapse, or buyers who decided to wait and keep waiting for even better deals, until in the end they decided not to buy at all. Blaming the weather we understand, as do the trend to convert purchases to “window shopping” – in a world in which everything is turning virtual, it only makes sense that Americans pretend to shop asl well.

What’s worse, however, is that the deus ex of online sales is not appearing and will not save the day:

But even online sales aren’t growing at the expected pace. Online spending from home and work desktop computers in the U.S. from Nov. 1 through Dec. 15 was up 9 percent from the same period last year to $37.8 billion, according to the most available data from comScore.

 

That’s below the 14 percent growth that the Internet research firm is forecasting for the season.

 

Even though Black Friday holds the title as single busiest shopping day of the holiday season, the week before Christmas is traditionally the busiest week in the most important shopping season of the year. Many retailers depend on November and December to make as much as 40 percent of their annual revenue, the National Retail Federation says. But while 2013 is shaping up to be the largest holiday shopping season on record, retailers are not getting the photo finish they expected.

 

“The numbers are not devastating, but they are a bit alarming,” Martin said.

 

He is not revising his forecast of 2.4 percent overall growth in retail sales for November and December, already the slowest growth since 2009, because it was strong sales in early November that caused the softer late-season sales.

Finally, it appears that the strategy of pulling forward demand to the present through record discounts, and crushing margins in hopes of “making it up in volume” only works for those perpeptual non-cash flow generating juggernauts like Amazon, which on a long enough timeline will do everything (badly), and supposedly put everyone out of business. Just not yet.

Retailers began earlier than ever promoting deep discounts and deals to appeal to frugal consumers. Retail sales in November were up 4.7 percent from 2012, the Commerce Department reported.

 

“November was pretty strong, and that’s going to carry some weight into December,” Martin said. “If December ends up being flat, I expect we’re still going to have a 2.4 percent increase.”

 

There are some strong shopping days left before the end of the month, he said, and retailers will push hard to get shoppers back into their stores post-Christmas to exchange gifts, use gift cards and take advantage of post-holiday promotions. Gift cards are not recorded as sales until they are exchanged for merchandise, and because 80 percent of shoppers plan to buy them this year, bringing total gift card spending to an all-time high of $29.8 billion, they could have a big influence on sales after the Christmas holiday.

 

Final sales figures for the holiday shopping season are expected in January.

We can’t wait. In the meantime, we expect seasonally adjusted government retail sales data to indicate once again, that all is well, and that it is not the ARIMA X 12 seasonal fudge-factor goalseeker that is wrong, but that it is reality which is at fault.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zNeSKT0_syI/story01.htm Tyler Durden

Retail Traffic Plunges By “Staggering” 21% In Week Before Christmas

That it has been one of the most lacklustre shopping seasons in recent years has already been repeatedly covered, with average holiday spending expected to decline for the first time since the Great Financial Crisis of 2008, all this despite record promotions and an ever earlier start to Black Friday.

Another chart showing the same trend from Bloomberg, with the comment that the “eroding middle class can no longer drive activity as it has in the past” – that’s odd: we said the same thing in late 2009 for which we got yet another label of tinfoil conspiracy theorists…

However, while the early start to shopping season has missed expectations, driven primarily by an unprecedented weakness in traditional bricks and mortar outlets, there was some hope that the last stretch into Christmas and the New Year would provide a much needed, last minute bump. Those hopes were dashed last night when Shopptertrack reported that retail traffic plummeted by an unprecedented 21% last week, and in-store sales decreased 3.1% from the year before, dashing retailers’ hopes that the final stretch before Christmas would offset soft sales numbers earlier in the holiday shopping season.

UT San Diego reports:

The disappointing numbers, released by ShopperTrak on Monday, are “kind of staggering,” said the research firm’s founder, Bill Martin, who last week voiced optimism that retailers would see a noticeable spike in traffic and sales the week of Dec. 16-22 after two consecutive weeks of decreases in both.

 

He attributed the latest nosedive to successful November promotions, and bad weather last week in the Midwest and other central states. An increase in virtual window-shopping has prevented consumers throughout the shopping season from setting foot in many stores to look, feel and compare prices, he added.

Wait, November promotions were successful? For whom: retailers whose bottom lines got crushed in the margin collapse, or buyers who decided to wait and keep waiting for even better deals, until in the end they decided not to buy at all. Blaming the weather we understand, as do the trend to convert purchases to “window shopping” – in a world in which everything is turning virtual, it only makes sense that Americans pretend to shop asl well.

What’s worse, however, is that the deus ex of online sales is not appearing and will not save the day:

But even online sales aren’t growing at the expected pace. Online spending from home and work desktop computers in the U.S. from Nov. 1 through Dec. 15 was up 9 percent from the same period last year to $37.8 billion, according to the most available data from comScore.

 

That’s below the 14 percent growth that the Internet research firm is forecasting for the season.

 

Even though Black Friday holds the title as single busiest shopping day of the holiday season, the week before Christmas is traditionally the busiest week in the most important shopping season of the year. Many retailers depend on November and December to make as much as 40 percent of their annual revenue, the National Retail Federation says. But while 2013 is shaping up to be the largest holiday shopping season on record, retailers are not getting the photo finish they expected.

 

“The numbers are not devastating, but they are a bit alarming,” Martin said.

 

He is not revising his forecast of 2.4 percent overall growth in retail sales for November and December, already the slowest growth since 2009, because it was strong sales in early November that caused the softer late-season sales.

Finally, it appears that the strategy of pulling forward demand to the present through record discounts, and crushing margins in hopes of “making it up in volume” only works for those perpeptual non-cash flow generating juggernauts like Amazon, which on a long enough timeline will do everything (badly), and supposedly put everyone out of business. Just not yet.

Retailers began earlier than ever promoting deep discounts and deals to appeal to frugal consumers. Retail sales in November were up 4.7 percent from 2012, the Commerce Department reported.

 

“November was pretty strong, and that’s going to carry some weight into December,” Martin said. “If December ends up being flat, I expect we’re still going to have a 2.4 percent increase.”

 

There are some strong shopping days left before the end of the month, he said, and retailers will push hard to get shoppers back into their stores post-Christmas to exchange gifts, use gift cards and take advantage of post-holiday promotions. Gift cards are not recorded as sales until they are exchanged for merchandise, and because 80 percent of shoppers plan to buy them this year, bringing total gift card spending to an all-time high of $29.8 billion, they could have a big influence on sales after the Christmas holiday.

 

Final sales figures for the holiday shopping season are expected in January.

We can’t wait. In the meantime, we expect seasonally adjusted government retail sales data to indicate once again, that all is well, and that it is not the ARIMA X 12 seasonal fudge-factor goalseeker that is wrong, but that it is reality which is at fault.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zNeSKT0_syI/story01.htm Tyler Durden

Today's Early Market Closure Schedule

What time can you go home today? Find out with the schedule of early market closures below:

Floor Trade:

  • CME/CBOT – Early Close: Equities – 12:15PM Central; Interest Rates, FX, Commodities – 12:00PM Central
  • NYMEX – Early Close: 1:30PM Eastern
  • COMEX – Early Close: 11:30AM Central
  • NYSE – Early Close: 1:00PM Eastern

 

Electronic Trade:

  • CME Globex – Early Close Equities, Interest Rates, FX: 12:15PM Central
  • NYMEX – Early Close: 1:45PM Eastern
  • NYSE LIFFE – Early Close 7:00AM Eastern
  • Eurex – Closed

 

Individual Cash Index:

  • FTSE – 7:30AM Eastern
  • IBEX 35 – 8:00AM Eastern
  • Amsteram Exchange, CAC 40, PSI 20, BEL 30: 8:05AM Eastern  
  • (Germany, Italy, Switzerland, Norway and Sweden Closed)

Source: RanSquawk


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/DxMvW2YahZQ/story01.htm Tyler Durden