Tag: news

Submitted by Lance Roberts of STA Wealth Management,

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/my3wm-xwWcI/story01.htm Tyler Durden

… but for those who can, and wish to see beyond the propaganda of the Eurozone’s unelected leaders, here is Natixis with a candid, honest summary of Europe’s sad, “unsustainable” predicament.

Just when the consensus thinks Europe it is exiting the crisis…

by Patrick Artus of Natixis

This growing differential between real interest rates and growth rates is significantly harming borrowers’ solvency. Consider the case of public finances. Due to the widening differential between the real long-term interest rate and the real growth rate, the primary fiscal surplus which stabilises the public debt ratio (Chart 5) is currently (percentage points of GDP):

? 4.5 in Spain, versus an actual deficit of 4.0
? 7.0 in Italy, versus an actual surplus of 2.0;
? 11.7 in Portugal, versus a deficit of 1.0;
? 4.8 in Ireland, versus a deficit of 2.0;
? 26 in Greece, versus an actual deficit of 1.5.

These countries are therefore clearly entering deflation, a situation in which disinflation leads to excessively high real interest rates.

The rest of the euro zone is not in this situation. The real long-term interest rate in the euro zone, excluding the troubled countries, is 1%, just above the growth rate (Charts 7A and B); the euro zone excluding the troubled countries has no primary fiscal deficit (Chart 7C) and is therefore close to solvency.

The troubled euro-zone countries are faced with not only a rise in their real interest rates but also with the need to return to restrictive fiscal policies in 2014. In 2013 fiscal deficits were not reduced, except in Greece (Chart below, left), because these countries took advantage of the postponement of the date by which they have to bring their deficits under control. This situation is leading to a very rapid increase in public debt ratios (Chart below, right) and is therefore unsustainable; moreover, it is unacceptable for the European Commission, the ECB and Germany.

The ECB is therefore faced with a new heterogeneity in the euro zone. The troubled countries are being pushed into deflation due to the very large differential between real interest rates and growth rates which results from the rapid decline of inflation; this is not the case for the other countries. If the ECB does not react, the troubled countries will therefore find themselves in an even worse situation of confirmed deflation. What can it do? The solution that would be most effective, but is probably unacceptable for the ECB, would be to act like the Bank of Japan: massive purchases of government bonds of the troubled countries (Chart 10A) leading to a rise in inflation expectations and actual inflation (Charts 10B and C) and a fall in real long-term interest rates (Chart 10C). The probability of the ECB conducting this policy is very low; part of the euro zone is therefore likely to become mired in deflation just when the consensus thinks that it is exiting the crisis.

Source: Natixis

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kj35xU6XCbc/story01.htm Tyler Durden

… but for those who can, and wish to see beyond the propaganda of the Eurozone’s unelected leaders, here is Natixis with a candid, honest summary of Europe’s sad, “unsustainable” predicament.

Just when the consensus thinks Europe it is exiting the crisis…

by Patrick Artus of Natixis

This growing differential between real interest rates and growth rates is significantly harming borrowers’ solvency. Consider the case of public finances. Due to the widening differential between the real long-term interest rate and the real growth rate, the primary fiscal surplus which stabilises the public debt ratio (Chart 5) is currently (percentage points of GDP):

? 4.5 in Spain, versus an actual deficit of 4.0
? 7.0 in Italy, versus an actual surplus of 2.0;
? 11.7 in Portugal, versus a deficit of 1.0;
? 4.8 in Ireland, versus a deficit of 2.0;
? 26 in Greece, versus an actual deficit of 1.5.

These countries are therefore clearly entering deflation, a situation in which disinflation leads to excessively high real interest rates.

The rest of the euro zone is not in this situation. The real long-term interest rate in the euro zone, excluding the troubled countries, is 1%, just above the growth rate (Charts 7A and B); the euro zone excluding the troubled countries has no primary fiscal deficit (Chart 7C) and is therefore close to solvency.

The troubled euro-zone countries are faced with not only a rise in their real interest rates but also with the need to return to restrictive fiscal policies in 2014. In 2013 fiscal deficits were not reduced, except in Greece (Chart below, left), because these countries took advantage of the postponement of the date by which they have to bring their deficits under control. This situation is leading to a very rapid increase in public debt ratios (Chart below, right) and is therefore unsustainable; moreover, it is unacceptable for the European Commission, the ECB and Germany.

The ECB is therefore faced with a new heterogeneity in the euro zone. The troubled countries are being pushed into deflation due to the very large differential between real interest rates and growth rates which results from the rapid decline of inflation; this is not the case for the other countries. If the ECB does not react, the troubled countries will therefore find themselves in an even worse situation of confirmed deflation. What can it do? The solution that would be most effective, but is probably unacceptable for the ECB, would be to act like the Bank of Japan: massive purchases of government bonds of the troubled countries (Chart 10A) leading to a rise in inflation expectations and actual inflation (Charts 10B and C) and a fall in real long-term interest rates (Chart 10C). The probability of the ECB conducting this policy is very low; part of the euro zone is therefore likely to become mired in deflation just when the consensus thinks that it is exiting the crisis.

Source: Natixis

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kj35xU6XCbc/story01.htm Tyler Durden

VPRO Backlight has just released the documentary we did with them earlier this year.  Wall Street Code is about the blatant and planned fixing of, specifically, the US financial markets.  After meeting with Haim Bodek and being introduced by him to the guys at Sang Lucci, we decided to ban together and contact Marije.  The following is a culmination of that initial meeting and the specials skills possessed by the journalists at VPRO.  @DirtyAutomatik aka Bryan Wiener who was Haim Bodek’s head trader and makes a special appearance worth noting.  Look for Bryan to join me over on BTFDtv.com on this coming Sunday to talk special order types and order book manipulation.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/JK3nuuRYNIU/story01.htm CalibratedConfidence

The Wall Street Journal noted in 2011:

When Tokyo Electric Power Co. broke ground on the now defunct Fukushima Daiichi nuclear-power station 44 years ago, the utility made a fateful construction decision that raised the plant’s vulnerability to the tsunami that ultimately crippled its reactors.

 

In 1967, Tepco chopped 25 meters off the 35-meter natural seawall where the reactors were to be located, according to documents filed at the time with Japanese authorities. That little-noticed action was taken to make it easier to ferry equipment to the site and pump seawater to the reactors. It was also seen as an efficient way to build the complex atop the solid base of bedrock needed to better protect the plant from earthquakes.

 

But the razing of the cliff also placed the reactors five meters below the level of 14- to 15-meter tsunami hitting the plant March 11, triggering a major nuclear disaster resulting in the meltdown of three reactor cores.

 

***

 

At the time, a 35-meter seaside cliff running the length of the property was a prominent feature of the site.

 

But Tepco outlined its intention to clear away about two-thirds of the bluff in its official request for permission from the government to build its first nuclear plant, according to a copy of the application reviewed by The Wall Street Journal.

 

“While the tsunami countermeasures at Fukushima Daiichi were considered sufficient when the plant was constructed, the fact that those defenses were overwhelmed is something that we take very seriously,” said Kouichi Shiraga, a public-affairs official at Japan’s Nuclear and Industrial Safety Agency.

 

***

 

The destruction of that natural tsunami barrier at the Fukushima Daiichi site contrasts starkly with later decisions in the 1970s to build the nearby Fukushima Daini and Onagawa nuclear-power plants at higher elevations. Despite being rocked by the massive March earthquake, both of those plants’ reactors achieved “cold shutdowns” shortly after the tsunami struck and thereby avoided the damage wreaked upon the crippled Daiichi plant.

 

Both of those plants, located along the same coastline as Daiichi, survived primarily because they were built at higher elevations, on top of floodwalls that came with the landscape. As a result, the tsunami didn’t result in an extended loss of power at those plants, allowing their operators to quickly cool active reactors and avoid meltdowns.

 

Tepco’s 1966 application for permission to start construction at Daiichi … did review tsunami history in a three-page list of seismic activity dating from 1273. In that chart, Tepco does reference a tsunami of unspecified height that struck the immediate area of Daiichi in 1677. It destroyed 1,000 homes and killed 300 people.

 

The application cites typhoons as the bigger threat, noting an 8-meter-tall wave generated in 1960. “Most large waves in this coastal area are the product of strong winds and low pressure weather patterns, such as Typhoon No. 28 in February of 1960, which produced peak waves measured at 7.94 meters,” it stated.

 

A former senior Tepco executive involved in the decision-making says there were two main reasons for removing the cliff. First, a lower escarpment made it easier to deliver heavy equipment used in the plant, such as the reactor vessels, turbines and diesel generators, all of which were transported to the site by sea. Second, the design of the plant required seawater to keep the reactor cool, which was facilitated by a shorter distance to the ocean.

 

“It would have been a very difficult and major engineering task to lift all that equipment up over the cliff,” says Masatoshi Toyota, 88 years old, the former top Tepco executive who helped oversee the building of the reactors at Fukushima Daiichi. “For similar reasons, we figured it would have been a major endeavor to pump up seawater from a plateau 35 meters above sea level,” he said in a telephone interview.

 

***

 

“Of course there is no record of big tsunami damage there because there was a high cliff at the very same spot” to prevent it, said Mr. Oike, the seismologist on the investigation committee.

 

And Daiichi’s lower elevation contrasted with plants that were built in the following years along the same coast.

 

***

 

The Onagawa site, 60 miles north of Daiichi, was selected in large part because of its height beyond the reach of any recorded tsunami, according to a former executive at a Japanese manufacturer involved in the work.

Many Other Negligent Or Criminal Errors

Tepco has made many other negligent or criminal errors:

• Engineers warned Tepco and the Japanese government many years before the accident that the reactors were seismically unsafe … and that an earthquake could wipe them out.  For example, the team of engineers sent in to inspect found that most of these components could “completely and utterly fail” during an earthquake. But Tepco covered this up

• The Fukushima reactors were fatally damaged before the tsunami hit … the earthquake took them out even before the tidal wave hit

• Tepco admitted to repeatedly falsifying safety tests. Tepco covered up cracked reactor core containment vessel and other serious problems for decades

• An official Japanese government investigation concluded that the Fukushima accident was a “man-made” disaster, caused by “collusion” between government and Tepco and bad reactor design

• Tepco knew right after the 2011 accident that 3 nuclear reactors had lost containment, that the nuclear fuel had “gone missing”, and that there was in fact no real containment at all. Tepco has desperately been trying to cover this up for 2 and a half years … instead pretending that the reactors were in “cold shutdown”

• Tepco just admitted that it’s known for 2 years that massive amounts of radioactive water are leaking into the groundwater and Pacific Ocean

• Tepco – with no financial incentive to actually fix things – has only been pretending to clean it up. And see this

• Tepco has been directly hiring Yakuza gang members from criminal shell companies as a regular, ongoing practice

• Tepco’s recent attempts to solidify the ground under the reactors using chemicals has backfired horribly. And NBC News notes: “[Tepco] is considering freezing the ground around the plant. Essentially building a mile-long ice wall underground, something that’s never been tried before to keep the water out. One scientist I spoke to dismissed this idea as grasping at straws, just more evidence that the power company failed to anticipate this problem … and now cannot solve it.”

Letting Tepco remove the fuel rods is like letting a convicted murderer perform delicate brain surgery on a VIP.

Top scientists and government officials say that Tepco should be removed from all efforts to stabilize Fukushima. An international team of the smartest engineers and scientists should handle this difficult “surgery”.

Paul Gunter of Beyond Nuclear (who sent us the Wall Street Journal article) sums it up pretty well:

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/9HTnIG9V30A/story01.htm George Washington

Submitted by James H. Kunstler of Kunstler.com,

The ObamaCare website rollout fiasco, joined by the bait-and-switch “You can keep your current insurance (not)” tempest, obscure the fundamental quandary about so-called health-care in America: that it is a gigantic racket structured to allow countless layers of grift and counter-grift. The end product of all that artifice is that medical care costs twice as much in America as any other civilized country, and that it has to be operated by a cruel and despotic matrix of poorly coordinated bureaucracies that commonly leave people more disabled financially than the diseases that brought them into the system.

ObamaCare was designed to work like a giant roll of duct tape that would allow the current cast of characters in charge (Democratic Progressives) to pretend that the system could keep going a few years longer. But it looks like it has already blown out the patch on the manifold and is getting ready to throw a rod — which duct tape will not avail to fix.

I had three major surgeries (hip, open heart, spine) the past year and paid attention to the statements that rolled in from my then-insurer, Blue Shield (the policy was cancelled in October). These documents were always advertised as “this is not a bill” and that was technically true, but it deflected attention from what it really was, a record of negotiated scams between the “providers” (doctors and hospitals) and the insurance company.

 

There was never any discussion (or offer of discussion) of the cost of care before a procedure. When asked, doctors commonly pretend not to know what their work costs. Why is that? It’s not to spare the patient’s feelings. It’s because sick people are hostages and both the doctors and the hospital management know they will agree to anything that will get them through the crisis of illness. This sets up a situation that allows the “providers” to blindside the patient with charges after the fact.

 

My hip “revision” operation was necessary because my original implant was a defective (“innovative” circa 2003) metal-on-metal joint that released metal fragments into my system and it had to be removed. The stated charge for replacement part — a simple two piece bearing made of metal and plastic, about the size of tangerine — was $14,000. Blue Shield “negotiated” the price down to about $7,000. If you go to the websites of any of the manufacturers of these things, you will not see any suggested retail or wholesale price. The markup on these things must be out of this world. Cars come with four ball joints that carry roughly the same time warrantee, and they come with a staggering array of “extras”— engines, transmissions, air-conditioning, seats, air-bags, and radios. The pattern was similar for the other surgeries and what they entailed. I ended up paying five-figures out-of-pocket. Lucky for me that I saved some money before this all happened. I don’t have kids so I haven’t been paying extortionate college tuitions during my peak income years.

 

All the surgeries I had required hospital stays. For the hip op, I was in for a day and a half in a non-special bed (no fancy hookups). The charge was $23,000 per day. For what? They took my blood pressure nine times. I got about six bad meals. The line charge on the Blue Shield statement said “room and board.” It would be a joke if this extortion wasn’t multiplied millions of times a day across the nation. Citizen-hostages obviously don’t know where to begin to unravel this skein of dreadful rackets. If you think it’s possible to have a productive conversation with an insurance company rep at the other end of the phone line, then you’re going to be disappointed. You might as well be talking to a third-sub-deputy under-commissar in the Soviet motor vehicle bureau.

This ghastly matrix of corruption really only has two ways to go. It can completely implode in a fairly short time frame (say, five years, tops), or we can, by some miracle of political will, get our priorities straight and sweep away all the layers of racketeering with a single-payer system. The evidence in other civilized countries is not so encouraging. England’s National Health Service has degenerated into a two layer system of half-assed soviet-style medicine for the proles and concierge service for the rich. France’s system works more democratically, but the nation is going bankrupt and eventually their health care network will fall apart. The Scandinavian countries have relatively tiny populations. I don’t know, frankly, how the Germans are doing.

Here in the USA, you can make arguments for putting a greater share of public money into a single-payer system. For instance, if we redirected the money spent on our stupid military adventures and closed some of the countless redundant bases we run overseas. That would be a biggie. Given the current choke-hold of the military-industrial complex on our politicians, I wouldn’t expect much traction there.

You can argue that nobody complains about government spending on the highway system, so why should “the people” complain about organizing a medical system that really works? Obviously, there’s no consensus to make that happen. Too many doctors want to drive BMWs. Too many insurance executives and hospital administrators want to make multi-million dollar salaries. Too many lobbyist parasites and lawyers are feeding off that revenue stream. Too many politicians with gold-plated health insurance coverage don’t want to change the current distribution of goodies. End-of-story, as the late Tony Soprano used to say.

It’s the old quandary of fire or ice… which way do you want to go? Since I’m interested in reality-based outcomes, my bet would be on implosion. In any case, several of the other systems that currently support the activities of our society are scheduled for near-term implosion, too. That would be the banking-finance system, the energy supply system, and the industrial agriculture system. As those things wind down or crash, you can be sure that everything connected with them will be affected, so the chance that we could mount a real national health care system is, in my opinion, zero.

The ObamaCare duct-taped system will go down. The big hospitals, HMOs, insurers, pharma companies will all starve and shrivel. Like all things in the emergent new paradigm, they will reorganize on a small and much simpler basis. Everyone will make less money and high-tech medicine will probably dwindle for all but a very few… and for them, only for a while. Eventually, we’ll re-set to local clinic style medicine with far fewer resources, specialties, and miracle cures. There will be a whole lot less aggravation, though, and people may die more peacefully.

Finally, there’s the pathetic American lumpen-public of our day itself, steadily committing suicide en masse by corn byproducts, the three-hundred pounders lumbering down the Wal-Mart aisles in search of the latest designer nacho. What can you do about such a people, except let fate take them where it will?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/s9HzrxixnfY/story01.htm Tyler Durden