Tag: news

In yet another miracle of modern-day macroeconomics, despite the soaring stock market and better-than-expected government-provided data (soft surveys mostly), the small-business (supposedly the core driver of jobs and growth in the US economy) saw optimism collapse at the fastest rate since Sandy (supposedly due to the government shutdown). This is the fifth month in a row that NFIB optimism has missed expectations (the worst – absent Sandy – since March 2012). 7 of the 10 sub-components were negative with the biggest plunge coming from those who expect the economy to improve. Seems like another good reason to BTFATH…

 

 

Chart: Bloomberg

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

 

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Andrew Huszar

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/04Tm4ZTimMw/story01.htm williambanzai7

With the numbers of ‘real’ enrollees in Obamacare looking dismal relative to government expectations, and the deadline for the first official details of the health law’s enrollment figures due later this week, the administration has decided – in an oh so US Government-esque move – to change the rules. An enrollee is now defined as people who have purchased a plan (normal health insurance plan protocol) as well as those who have a plan sitting in their online shopping cart but have not yet paid. As The Washington Post notes, the disparity in the numbers is likely to further inflame the political fight especially in light of the fact that – for context – the average e-commerce shopping cart abandonment rate is 67%.

 

Via The Washington Post,

The fight over how to define the new health law’s success is coming down to one question: Who counts as an Obamacare enrollee?

 

Health insurance plans only count subscribers as enrolled in a health plan once they’ve submited a payment. That is when the carrier sends out a member card and begins paying doctor bills.

 

When the Obama administration releases health law enrollment figures later this week, though, it will use a more expansive definition. It will count people who have purchased a plan as well as  those who have a plan sitting in their online shopping cart but have not yet paid.

 

“In the data that will be released this week, ‘enrollment’ will measure people who have filled out an application and selected a qualified health plan in the marketplace,” said an administration official, who requested anonymity to frankly describe the methodology.

 

The disparity in the numbers is likely to further inflame the political fight over the Affordable Care Act. Each side could choose a number to make the case that the health law is making progress or failing miserably.

 

read more here

So, yet again, the baffle em with bullshit propaganda machine that was once beholden only to the Chinese is now ubiquitous with political factions ‘picking’ – or manufacturing – the numbers that suit them – as opposed to ever facing up to the reality of unintended consequences and the end of the free lunch…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4obsaZGcwk8/story01.htm Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Actions create consequences, and not necessarily the consequences that were planned or expected.

A central tenet of propaganda is that the Big Lie repeated often enough is accepted with greater ease than small lies. Thus it is no surprise that the leadership and propaganda organs of the Fed, Federal government and the Keynesian cargo Cult of fellow travelers all repeat our era's Big Lie: There is a free lunch after all.

The common-sense saying that "there's no free lunch" has been refuted, according to the Fed and our political "leadership" (if you call bought-and-paid-for toadies, lackeys and apparatchiks for the monied classes "leaders").

There are two free lunches, according to our financial and political leaders: free money, in the form of money created out of thin air by the Fed, and almost-free money borrowed into existence by the Federal government.
With the Fed's free lunch, trillions of dollars are created and distributed to banks and those who can borrow this free money for next to nothing.

In the Federal government's almost free lunch (it is almost free as a result of the Fed's financial repression of interest rates to zero, the infamous ZIRP – zero interest rate policy), the central state borrows and blows essentially limitless sums on favored cartels and constituencies: sickcare, global empire, bridges to nowhere, etc.

We are constantly reassured that the Fed can print (and distribute to its banker buddies) $1 trillion a year with nothing but positive consequences for the bottom 99.9%. On the fiscal side, the Federal government borrowing and squandering $1+ trillion a year is heralded as equally positive for everyone–especially the 49% of the populace drawing a direct cash benefit from the Federal government: Census: 49% of Americans Get Gov’t Benefits; 82M in Households on Medicaid.

Possible blowback? None, or so we're told. If anything, the Keynesian parrots squawk, we need to borrow and blow $2 trillion a year rather than a paltry $1+ trillion. (We're running out of cartels, quasi-monopolies, foreign wars, spy agencies and other ratholes to pour trillions down; yikes, what a problem for Krugman et al. Maybe the Martians can supply us with some more rapacious cartels or a planetary war.)

These two charts raise doubts about the sustainability of the Fed and government's free lunch. The first is the monetary base, which just hit $3.5 trillion.

The second one is Federal external debt, i.e. the Federal debt not including "intergovernmental holdings," what is "owed" to the fictitious Social Security Trust Funds. Total national debt is $17 trillion, debt we actually have to roll over is $12 trillion and rising by $1 trillion a year. Debt to the Penny (U.S. Treasury site).

At the start of 2008, before the global financial meltdown gathered momentum, debt owed to the public was $5.1 trillion. Now it is $12.2 trillion, an increase of $7 trillion in less than six years. According to the Big Lie, this is no problem, and entirely sustainable: here's your Free Lunch, America, enjoy!

Big Lie, meet unintended consequences. The problem with Big Lies is reality has not been disappeared; it still exists. Actions create consequences, and not necessarily the consequences that were planned or expected.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/n4FUS296uUM/story01.htm Tyler Durden

A few hours ago, the “historic” and “most important ever” (just like ever payrolls report) Chinese plenum concluded. And like everything out of China, it was big on promises and scant on details. Among the numerous assurances of reform, the plenum promised: to deepen reform of the medical system and in the education sector, to speed up free trade zone development, to clear barrier in markets, to deepen national defense and military reform, to reform the income distribution system, reiterated the main role of public ownership and said there would be reform of government-market relations. And all of this would yield results by 2020. Essentially, words so hollow one can’t help but doubt this was merely the latest smokescreen to justify the perpetuation of the status quo, investment-based economy which as the BBG Brief chart below shows, instead of becoming more consumption driven which is what China has been feverishly attempting to achieve, has instead become ever more reliant on consumption.

Perhaps the most notable (and we use the term loosely) result from the plenum, was a shift in language, when the Communist Party acknowledged the market’s “decisive” role in allocating resources, as opposed to just “basic” according to a communique issued after its key session about reform. Xinhua has more:

China will deepen its economic reform to ensure that the market will play a “decisive” role in allocating resources, according to the communique after the Third Plenary Session of the 18th CPC Central Committee, which closed here Tuesday.

 

The market had been often defined as a “basic” role in allocating resources since the country decided to build a socialist market economy in 1992.

 

While following its basic economic system and improving it, the country will work to improve the modern market system, macro-regulatory system and an open economy, the document said.

 

To let the market decide the allocation of resources, the primary task is to build an open and unified market with orderly competition, according to the document.  Land in cities and the countryside, which can be used for construction, will be pooled in one market, it said.

 

Under a modern market system, businesses should be allowed to operate independently and compete fairly while consumers should be free to choose and spend. Also, merchandise can be traded freely and equally, the document said.

 

In the document, the CPC pledged to clear barriers in the market and improve the efficiency and fairness in the allocation of resources. It will also create fair, open and transparent market rules and improve the market price mechanism.

So does this mean that China is now officially more capitalist than the US, whose market has devolved to having a very basic, centrally-planned, and manipulated role of preserving the wealth effect, and the illusion that the US economy is now cratering with each passing day?

Alas, no. This is merely more jawboning to give the impression that China is serious about market reform. Why? Because with the various local stock markets having not increased their depth in the past 5 years, all the excess liquidity ends up in the housing sector and makes housing inflation a huge issue for the CPC. What China would prefer is to have its stock market act like that of the US, and provide the liquidity buffer that absorbs all those trillions in annual liquidity injections by central banks. Good luck with that.

As for everything else, Reuters explains why the Plenum was nothing but another dud on China’s path to non-reform.

The party did not issue any bold reform plans for the country’s state-owned enterprises (SOEs), saying that while both state firms and the private sector were important and it would encourage private enterprise, the dominance of the “public sector” in the economy would be maintained.

 

While the statement was short on details, it is expected to kick off specific measures by state agencies over the coming years to reduce the role of the state in the economy.

 

Historically, such third plenary sessions of a newly installed Central Committee have acted as a springboard for key economic reforms, and this one will also serve as a first test of the new leadership’s commitment to reform.

 

Among the issues singled out for reform, the party said it would work to deepen fiscal and tax reform, establish a unified land market in cities and the countryside, set up a sustainable social security system, and give farmers more property rights – all seen as necessary for putting the world’s second-largest economy on a more sustainable footing.

 

President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.

 

Out of a long list of areas that the meeting was expected to tackle, most analysts have singled out a push towards a greater role of markets in the financial sector and reforms to public finances as those most likely to get immediate attention.

 

As part of that, Beijing is expected to push forward with capital account convertibility, and the 2020 target date for making significant strides on reform could set off expectations that the government will be looking to achieve breakthroughs on freeing up the closely managed yuan by then.

 

Few China watchers had expected Xi and Li to take on powerful state monopolies, judging that the political costs of doing so were just too high. Many economists argue that other reforms will have only limited success if the big state-owned firms’ stranglehold on key markets and financing is not tackled.

Bottom line: as former Fed bond market manipulated Andrew Huszar admitted, no government will ever engage in difficult, voluntary reforms (which by definition will infuriate the population), until they have no choice but to do so. Which means only after central banks lose control of risk assets, and Mr. Chairmen around the world are no longer able “to get to work” and make the politicians’ lives easier. Until then, it is just smoke and mirrors.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-NCwqa9YIkU/story01.htm Tyler Durden

A few hours ago, the “historic” and “most important ever” (just like ever payrolls report) Chinese plenum concluded. And like everything out of China, it was big on promises and scant on details. Among the numerous assurances of reform, the plenum promised: to deepen reform of the medical system and in the education sector, to speed up free trade zone development, to clear barrier in markets, to deepen national defense and military reform, to reform the income distribution system, reiterated the main role of public ownership and said there would be reform of government-market relations. And all of this would yield results by 2020. Essentially, words so hollow one can’t help but doubt this was merely the latest smokescreen to justify the perpetuation of the status quo, investment-based economy which as the BBG Brief chart below shows, instead of becoming more consumption driven which is what China has been feverishly attempting to achieve, has instead become ever more reliant on consumption.

Perhaps the most notable (and we use the term loosely) result from the plenum, was a shift in language, when the Communist Party acknowledged the market’s “decisive” role in allocating resources, as opposed to just “basic” according to a communique issued after its key session about reform. Xinhua has more:

China will deepen its economic reform to ensure that the market will play a “decisive” role in allocating resources, according to the communique after the Third Plenary Session of the 18th CPC Central Committee, which closed here Tuesday.

 

The market had been often defined as a “basic” role in allocating resources since the country decided to build a socialist market economy in 1992.

 

While following its basic economic system and improving it, the country will work to improve the modern market system, macro-regulatory system and an open economy, the document said.

 

To let the market decide the allocation of resources, the primary task is to build an open and unified market with orderly competition, according to the document.  Land in cities and the countryside, which can be used for construction, will be pooled in one market, it said.

 

Under a modern market system, businesses should be allowed to operate independently and compete fairly while consumers should be free to choose and spend. Also, merchandise can be traded freely and equally, the document said.

 

In the document, the CPC pledged to clear barriers in the market and improve the efficiency and fairness in the allocation of resources. It will also create fair, open and transparent market rules and improve the market price mechanism.

So does this mean that China is now officially more capitalist than the US, whose market has devolved to having a very basic, centrally-planned, and manipulated role of preserving the wealth effect, and the illusion that the US economy is now cratering with each passing day?

Alas, no. This is merely more jawboning to give the impression that China is serious about market reform. Why? Because with the various local stock markets having not increased their depth in the past 5 years, all the excess liquidity ends up in the housing sector and makes housing inflation a huge issue for the CPC. What China would prefer is to have its stock market act like that of the US, and provide the liquidity buffer that absorbs all those trillions in annual liquidity injections by central banks. Good luck with that.

As for everything else, Reuters explains why the Plenum was nothing but another dud on China’s path to non-reform.

The party did not issue any bold reform plans for the country’s state-owned enterprises (SOEs), saying that while both state firms and the private sector were important and it would encourage private enterprise, the dominance of the “public sector” in the economy would be maintained.

 

While the statement was short on details, it is expected to kick off specific measures by state agencies over the coming years to reduce the role of the state in the economy.

 

Historically, such third plenary sessions of a newly installed Central Committee have acted as a springboard for key economic reforms, and this one will also serve as a first test of the new leadership’s commitment to reform.

 

Among the issues singled out for reform, the party said it would work to deepen fiscal and tax reform, establish a unified land market in cities and the countryside, set up a sustainable social security system, and give farmers more property rights – all seen as necessary for putting the world’s second-largest economy on a more sustainable footing.

 

President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.

 

Out of a long list of areas that the meeting was expected to tackle, most analysts have singled out a push towards a greater role of markets in the financial sector and reforms to public finances as those most likely to get immediate attention.

 

As part of that, Beijing is expected to push forward with capital account convertibility, and the 2020 target date for making significant strides on reform could set off expectations that the government will be looking to achieve breakthroughs on freeing up the closely managed yuan by then.

 

Few China watchers had expected Xi and Li to take on powerful state monopolies, judging that the political costs of doing so were just too high. Many economists argue that other reforms will have only limited success if the big state-owned firms’ stranglehold on key markets and financing is not tackled.

Bottom line: as former Fed bond market manipulated Andrew Huszar admitted, no government will ever engage in difficult, voluntary reforms (which by definition will infuriate the population), until they have no choice but to do so. Which means only after central banks lose control of risk assets, and Mr. Chairmen around the world are no longer able “to get to work” and make the politicians’ lives easier. Until then, it is just smoke and mirrors.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-NCwqa9YIkU/story01.htm Tyler Durden