Monday, October 27, 2014

Having read the ECB stress test, I am stressed

I cannot tell you the relief this tweet gave me. Maybe it was hand relief – I’m not sure – but as Eckhart Tolle would write, ‘It is the end of all pain’. For now I can sleep safe in the knowledge that Greek banks have little shortfall on a dynamic basis. Oh joy.
I mean, let’s get real here: if the ECB says the basis of dynamic fall is not only short but little, then surely we have nothing to worry about. Er, um, well…here’s another tweet:
3eurobankOh dear, or something. Three Cypriot banks…that’s all of them, isn’t it?
And two Belgian banks….don’t the Belgians have an economy 78% focused on running the EU?
Monte del Peische is, as I write, appointing outside advisors to help it look for a merger partner. This makes me wonder what the chances might have been of success had the Führerbunker appointed IG Farben to look for a Jewish American consortium with which to partner in May 1945.
And all this, we’re told, is an exercise through which (as one very sound observer suggests) ‘The ECB wants you to believe that the European banking sector is safe and sound’. No shit.
In pursuit of that aim, I can report that the capital shortfall of €25bn revealed at 25 euro area banks in 2013 has now been reduced to €15bn in 2014.
Just one problem: in carrying out this stress-test, the ECB unearthed an addditional €136bn in non-performing exposures…..which does cast something of a long, dark shadow across the €10bn shortfall improvement Thing.
I’m sorry folks, but this stress test is hoist by its own facade. It is a charade. A canard. A Cunard liner launched under the name of SS Titanic.
I am more than delighted to point out that this Slogpost borrows heavily for its maths upon this site.

Why You Need To Own Gold Before It’s Too Late

Ron Paul on the Federal Reserve Conspiracy – Trillions of Dollars in Debt to Ourselves

Italy is in terminal decline, and no one has the guts to stop it

The Rome Opera House sacked its entire orchestra and chorus the other day. Financed and managed by the state, and therefore crippled by debt, the opera house — like so much else in Italy — had been a jobs-for-life trade union fiefdom. Its honorary director, Riccardo Muti, became so fed up after dealing with six years of work-to-rule surrealism that he resigned. It’s hard to blame him. The musicians at the opera house — the ‘professori’ — work a 28-hour week (nearly half taken up with ‘study’) and get paid 16 months’ salary a year, plus absurd perks such as double pay for performing in the open air because it is humid and therefore a health risk. Even so, in the summer, Muti was compelled to conduct a performance of La Bohème with only a pianist because the rest of the orchestra had gone on strike.
After Muti’s resignation, the opera house board did something unprece-dented: they sacked about 200 members of the orchestra and chorus, in a country where no one with a long-term contract can be fired. It was a revolutionary — dare one say Thatcherite? — act. If only somebody would have the guts to do something similar across the whole of the Italian state sector. But nobody will. Italy seems doomed.
The latest panic on global stock markets has reminded the world of the vulnerability of the euro, and this week pundits in the British press have been busy speculating about France’s possible collapse. Hardly anyone bothers to fret about Italy any more, even though last week its exchanges took the second biggest hit after Greece. Italy’s irreversible demise is a foregone conclusion. The country is just too much of a basket case even to think about.
Italy’s experience of the European monetary union has been particularly painful. The Italians sleepwalked into joining the euro with scarcely any serious debate, and were so keen to sign up that they accepted a throttlingly high exchange rate with the lira. The price of life’s essentials, such as cigarettes, coffee and wine, doubled overnight while wages remained static — though back then jobs were still easy to find and money easy to borrow. But when the great crash happened, Italy, as a prisoner of a monetary union without a political union, was unable to do anything much about it, and could not even resort to the traditional medicine of currency devaluation.
The only path to recovery permitted by Brussels and Berlin — that of austerity — has been counterproductive because it has only been skin-deep. If austerity is to stimulate growth, it must be done to the hilt, which inevitably involves terrible suffering and the risk of mass agitation. No Italian politician can stomach that.
Italy can’t blame all its problems on monetary union, however. The euro did not cause the catastrophe, but it deprived Italy of a means to combat it and exposed its fatal structural weaknesses.
Source and full piece: Nicholas Farrell, The Spectator, 25 October 2014

One in five Eurozone banks struggling with financial problems

The European Central Bank says one in five Eurozone banks is grappling with financial problems with Italy’s banks hit hardest by the ongoing crisis.
The ECB said on Sunday that 13 of Europe’s top banks have failed an in-depth review of their finances and need to increase their capital buffers against losses by 10 billion euros (USD 12.5 billion).
“A total of 25 billion capital shortfalls were identified across 25 participating banks as a joint result of the AQR (Asset Quality Review) and the stress test,” ECB Vice President Vitor Constancio said, adding, “Out of the 25, 12 banks have already taken measures in 2014 that are enough to cover their shortfall.”
“There are then 13 banks that still have either to exactly apply their restructuring downsize as it is foreseen in their plans with the European Commission, or they will have to come up with ways to increase their capital,” he added.
Constancio made the statement based on a crunch audit aimed at preventing a repeat of the financial crisis that nearly led to the euro’s collapse.
The ECB, however, said 25 banks still need 25 billion euros to guarantee themselves against any future crises.
The worst results were seen in Italy, where nine banks failed, as well as in Greece and Cyprus with three each.
Even Germany, which has been doing well with exports, is witnessing a slowing growth on the back of weak investment.
The ECB has been criticized for similar stress tests, carried out by the EU in 2010 and 2011, which gave a pass to banks that later needed bailouts.
Source: Press TV, 26 October 2014

Amazon’s Leading Indicator Of Profitless Prosperity: Year 2000 Redux?

Wolf Richter,
In December 1999, it started crashing, a leading indicator of investor exasperation. Now it’s down 33% from its February high .
This shouldn’t surprise anyone, but by the way the stock plunged after Amazon announced its blistering third quarter loss, it seems plenty of people got caught with their pants down. The stock is now off 12% in after-hour trading as I’m writing this. But what the dickens were people expecting? That Amazon would make money, like normal mature retailers?
Heck no. That would be too uncool for Amazon. Amazon doesn’t need to make money.
Revenues rose 20% from a year ago to $20.6 billion, yet it lost $437 million. That’s about ten times what it lost in the quarter a year ago. With the current loss, the financial year-to-date sinkhole is $455 million.
But Amazon is no slouch. It finagled $205 million in income tax benefits, graciously provided for by hapless taxpayers. Its loss before income taxes is actually $634 million.
You have to read through four paragraphs of its press release, praising sundry metrics, before you get to the first mention of the word “loss.” If, exasperated by this much hype, you stop reading, you’d probably be better off.
And then there’s CEO Jeff Bezos holding forth on how they’re going to do this and that:
As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever. In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like….
Yada-yada-yada. It’s the same song and dance we’ve been hearing for years. How about explaining to exasperated shareholders how Amazon is going to make a net profit?
Well, after an eternal list of doodads, thingamajigs, and services that Amazon has already rolled out or will roll out, it finally gets to the part of how it is going to make a net profit.
Um, it’s not going to make a net profit.
It explains: “Operating income (loss) is expected to be between $(570) million and $430 million, compared to $510 million in fourth quarter 2013.”
Here’s the thing: Aside from being a range that extends all the way from Kabul to Seattle, even at the optimistic top end of making an operating profit of $430 million, Amazon would remain in its financial sinkhole for the year.
Its net loss so far this year is $455 million. And the Q4 net profit, if any, is going to be lower than the operating profit. So in all likelihood, 2014 is going to be another red-ink year. It barely made money in 2013 ($274 million, a rounding error for a company with $74.5 billion in revenues). It lost $39 million in 2012. It made $631 million in 2011. This isn’t exactly an improving trend.
Now don’t get me wrong. I’ve been a satisfied customer of Amazon for fifteen years or so. I also published two books – BIG LIKE andTESTOSTERONE PIT – using Amazon’s services, and I have no complaints about how that worked. Amazon does a lot of things very well, and some things better than anyone else out there. It also uses and abuses its increasing heft in the market place to stifle competition and create a monopoly. It’s not cool, but hey, all big companies strive to do that. A monopoly is the corporate wet dream.
But Amazon doesn’t give a hoot about its stockholders. Never has. To heck with them. It clearly has no intention of making money. And it doesn’t have to because shareholders are still buying the shares. Even today, though at a much lower price.
The stock is now changing hands at $275 a share, as I’m writing this, a 52-week low, and down almost 33% from its all-time high in January of $408. Maybe shareholders are finally waking up to reality. And then there are memories: Amazon started crashing in December 1999, three months before the rest of the Nasdaq did. It was a leading indicator of investor exasperation. It didn’t take all that long before Amazon was down 80%.
And why the heck did Daimler just now turn its supposedly strategic investment, and one of the hottest stocks, into cash? What does it know that we don’t? Read…. Daimler Closes Tesla Hedge, Dumps Shares, Grabs Cash, Runs


Copper is in the dangerzone

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Copper is in the : full story: 

Corporate buyback tailwind winding down (via Yardeni)

View image on Twitter
Corporate buyback tailwind winding down (via Yardeni)

The “Save our Swiss gold” initiative is incompatible with the EUR/CHF peg

by Sober Look
This is every gold bull’s dream. The Swiss just might force their central bank to begin accumulating massive amounts of gold via the so-called “Save our Swiss gold” referendum. The Swiss National Bank (SNB) unwound a large portion of its gold holdings prior to the financial crisis and now it could be forced to buy it back over the next five years. Here is what the accumulation is likely to look like assuming the rest of the balance sheet stays constant.
Source: SNB
If the proposal passes in November, the SNB will also need to repatriate its physical gold holdings stored abroad (particularly in the US and the UK) back to Switzerland. The most difficult part of the law is that once the SNB buys any gold, it would no longer be permitted to sell the holdings at any time.
The law would require the SNB to hold at least 20% of its assets in gold (from less than 8% currently), likely forcing the central bank to unwind some of its foreign reserves.
Source: SNB
To understand why the SNB would need to sell its FX reserves, let’s start with a bit of background. The reason the SNB’s foreign reserves are so elevated is to a large extent the result of the 2008 financial crisis and more importantly the Eurozone crisis. Since the default of Lehman and through the euro area debt turbulence, depositors/investors moved assets out of the Eurozone into Switzerland. They feared a potential collapse of EMU banks, haircuts on euro-denominated deposits (which is what ultimately happened in Cyprus), and even the breakup of the euro – followed by redenomination back to pre-euro currencies and devaluation of the lira, drachma, escudo, etc.
Many moved assets to the relative safety and independence of the Swiss franc, which resulted in Swiss currency’s sharp appreciation against the euro (the chart below shows the euro depreciating against the franc).

The currency spike made Swiss products/services much more expensive in the Eurozone, driving Switzerland toward recession.
Moreover, the currency strength had generated deflation in Switzerland that was as severe as what we saw right after the financial crisis.
The Swiss National bank had to arrest the franc’s appreciation, which it did by imposing a currency peg to the euro. But in order to maintain the peg while everyone wanted to buy the Swiss franc, the SNB was forced to do the opposite – sell the franc and buy the euro. That’s why the SNB foreign reserves spiked during the eurozone crisis (see post from 2012) – with nearly half the reserves in euro.
Now back to the situation with the SNB’s gold holdings. It’s unlikely that the SNB would use Swiss francs to buy gold if forced to do so.  That’s because the SNB would need to “print” the currency (similarly to the Fed buying treasuries via QE), which would result in the central bank’s balance sheet expanding. But gold reserves would have to stay at 20% of total assets, forcing the SNB to buy more gold than planned due to larger balance sheet.
That means the central bank would need to sell something and replace it with gold in order to avoid unwanted balance sheet expansion. The SNB is therefore likely to sell foreign currencies, particularly the euro. And that could potentially put pressure on the EUR/CHF peg discussed above by weakening the euro.
Furthermore, if there is another “run on the euro” and the SNB is forced to defend the peg by buying more euros, the central bank would be also forced to buy more gold (by selling the euros). Such downward pressure on the euro is actually quite possible, should the ECB embark on a new QE effort on order to arrest disinflationary pressures.
In such a situation, large market participants would simply go long gold while shorting massive amounts of euro against the Swiss franc (possibly via options). If the SNB buys a great deal of euros to keep the peg fixed, it would also be forced to buy gold. In such a scenario the traders win on the gold appreciation. If the SNB gives up the peg and no longer buys gold, the euro falls sharply against the franc and the traders win – again. The peg becomes unsustainable.
The “Save our Swiss gold” initiative is therefore simply incompatible with the longer term EUR/CHF stability objectives.
Over the long run, the inability to sell any gold could in theory force the SNB’s balance sheet to be 100% gold. If the central bank assets for example grow to 5 times the current size (with the 20% rule in place), and then shrink back to their original size, the Swiss National Bank would be holding nothing but gold. It would no longer have the ability to do much of anything, especially address deflationary pressures.
What’s the likelihood that the “Save our Swiss gold” proposal passes? According to the GFS Bern poll for the November 30th referendum, 44% of respondents currently support it, 39% are against it and 17% are not yet decided. This is obviously too close to call, but the possibility of a “yes” vote is now quite real.


Rising debt/GDP not exclusively a euro zone problem.

Rising debt/GDP not exclusively a euro zone problem. US debt/GDP 2007: 62% 2013: 101% UK debt/GDP 2007: 43% 2013: 91%

Cognitive Elite – The Jewish Ghetto, Gaza and Detroit


Gilad Atzmon’s Talk

A Study of Jewish Identity Politics, offers a theory of cognitive ability distribution to explain Zionism, Jewishness, anti-semitism, and identity politics generally. September 29, 2014 video by Joe Friendly

This could be the “scariest” test for U.S. stocks in years

From Chris Kimble at Kimble Charting Solutions:

The S&P 500 has remained above rising support line (1) for nearly 5 years.
The decline in stock prices this month took the S&P below this support line and below its 100-Day Moving Average (DMA) for the first time in years.
The rally in prices over the past week now has the S&P kissing the underside of this old support line and its 100DMA, at the same time right now.
Bulls might be a little scared that this dual kiss of resistance could end up being a high in prices.
When is comes to importance, this is “Munster-sized” to see whether the bulls or bears win at this key price point!

Elderly are better off in Romania than Britain: Shock UK pensioner poverty statistics

BRITAIN's pensioners are some of the worst off in the EU and are at a greater risk of falling into poverty than those in Eastern Europe. 

Old man looking sad with head in his handsCurrently there are 1.7million living below the breadline [GETTY]
Some 15 countries come ahead of the UK when it comes to levels of poverty in the over-65s, according to a new report by the International Longevity Centre (ILC-UK).
The UK is performing worse than countries like Romania, Poland and Latvia, despite being the second richest in the Union.
A failing state pension system and low employment later in life has left 1.7million OAPs living below the breadline, experts say.
Some 16.1 per cent of British pensioners live in relative poverty, while Romania has just 15.4 per cent and Latvia has 13.9 per cent.
Germany, Austria, Spain, Denmark, Poland, Ireland, France, Norway, Slovakia, Luxembourg, the Czech Republic, Hungary and the Netherlands are all performing better than the UK.
Austerity cutbacks have meant those aged between 50 and 65 are struggling to remain in jobs until pensionable age, leaving them with less time to save for the future.
As many as 1.5 million over-50's were pushed out of work over the last eight years due to a combination of redundancy, ill health or forced early retirement, according to research by the Prince of Wales' Initiative for Mature Enterprises.
A spokeswoman for ILC-UK, said: “We could learn a lot from Europe, which is why we used the report to compare ourselves with our neighbours.
“The state pension is being squeezed and it is difficult for people to keep saving when earnings aren’t rising but their costs are increasing.”
Charities have called for the government to do more to support those in need.
It’s scandalous that so many older people in the UK are living in poverty and unable to afford decent food or a warm home
Caroline Abrahams
Caroline Abrahams, Charity Director at Age UK, said: “It’s scandalous that so many older people in the UK are living in poverty and unable to afford decent food or a warm home. Many pensioners live on very low, fixed incomes and have been walking a tightrope in recent years as food and utility bills have escalated.
“The government must do more to get vital money benefits to those who need extra support but a comprehensive national strategy is also urgently needed.”
The report, which will be released by ILC-UK next week, also shows the UK state pension is only 31.9 per cent of the average wage, meaning middle-income earners will experience a sharp drop in their standard of living if they have no other provisions.
Government sources argue the UK has a different system, with a focus on private pensions.
Experts argue that the poorest, who have no savings, are being let down.
Pensions expert Ros Altmann said: “The UK has one of the lowest state pensions in the developed world. “We rely heavily on private pensions but those who don’t have the chance to save, who maybe lose their job or, like many women, don’t have the chance to generate a larger state pension, are left living in poverty.
“If you can’t work you lose twice over. You have no income and you have no opportunity to save for the future.”
The Department of Work and Pensions are switching to a less complicated single-tier pension system as of next year in a bid to ensure the elderly receive what they are entitled to.
Auto-enrolment, where people automatically join a company pension scheme when they start a new job, was also introduced by the Coalition two years ago.
Minister for Pensions Steve Webb said:  “The Triple Lock means the basic State Pension is now at the highest percentage of earnings since 1992 – and we are helping today’s workers to save for a comfortable retirement with 4.7m workers now automatically enrolled into a workplace pension.“To help older workers, we have extended the right to flexible working, outlawed forced retirement and our Fuller Working Lives initiative is challenging outdated stereotypes.”


Keiser Report: Sinking British Ship

UK profit warnings at highest level since 2008

Tesco Tesco profits slumped for the first half of the financial year

Profit warnings by UK-listed firms have risen to their highest summer level in six years, according to a new report.
The report, by the consultancy firm EY, said quoted firms issued 69 profit warnings in the third quarter of 2014, up from 56 in the same period in 2013.
It is the highest level for the three-month period to 30 September since 2008, the forecaster added.
Supermarket giant Tesco was among the companies to issue profit warnings during the period.
Profit warnings are issued by companies quoted on a stock market to alert investors that profits will be lower than expected.
The survey said that despite a rise in economic input, firms were facing crowded and competitive markets.
It also said bargain-hunting customers, rapid structural change and, until recently, a strong pound had hampered progress.
'Perfect storm' EY head of restructuring for UK and Ireland Alan Hudson said: "New entrants, new technologies and shifting consumer behaviour continue to challenge established business models and nowhere is this more visible right now than in food retailing.
"The pressure on sales and margins is largely focused on established supermarkets, struggling to adapt to the move away from the big weekly shop and the challenge posed by an expanding group of warehouse, supermarket and high street discounters."
Six retailers issued warnings during the period covered, up from two in the second quarter and the highest number in three years.
The report said the sector faced big changes, despite retail sales rising throughout most of the summer.
Next Next also issued a profit warning during the period
The construction and materials industry issued a high number of warnings because older contracts have come under intense margin pressure due to rising costs.
Five warnings were issued in the sector, the highest total since the second quarter of 2012.
'Struggling to adapt' Mr Hudson added: "Contractors have found themselves in a 'perfect storm' of low-margin legacy contracts and rising costs.
"During the recession, many contractors priced aggressively in response to competitive pressures and the need to at least to cover their overheads and retain critical mass for better times."
EY capital transformation leader for Europe, Middle East, India and Africa, Keith McGregor, said: "Profit warnings have continued apace from the third into the fourth quarter.
"This implies that at best companies and markets are misreading the post-crisis economy and are struggling to adapt to rapid structural changes, and at worst have once again over-estimated the pace and nature of this recovery."


The desperation of retailers grows by the day. I head to Wal-Mart and Giant in Harleysville every Sunday morning at 7:00 am. to do my weekly grocery shopping. I go to Wal-Mart at opening to avoid the freaks we see weekly on the People of Wal-Mart post. The workers at Wal-Mart are only a small step above the customers. They can barely communicate, rarely look you in the eye, and generally act like they are prisoners in an asylum.
I’m in winter/bad times ahead prep mode. I had a load of fire wood delivered yesterday which I wheelbarrowed to the back yard and stacked with my already decent sized stack. Last week I took an empty propane canister back to Wal-Mart to replace it with a full canister. That would give me three full propane tanks. I left the empty tank outside next to the propane cage and went in to pay. The old lady cashier with the gravelly smoker voice told me she would call for someone to get me a new tank.
I went over the cage and patiently waited for a Wal-Mart drone to come out, unlock the propane cage and give me a full tank. Two minutes, five minutes, and eventually ten minutes go by with no one coming out to help me. The cashier pokes her head out the door and shrugs her shoulders and says no one is responding to her calls. What a well oiled machine they have at Wal-Mart. Eventually the old lady abandoned her cashier post and in a painstakingly slow manner proceeded to unlock one bin after another until she found a full tank. I’m sure a line of unhappy customers were piling up at the only register in the garden center while she spent ten minutes getting me my propane tank.
A transaction that should have taken five minutes from start to finish ended up taking closer to twenty five minutes, with another five or six customers also dissatisfied with their extra long wait. This is a perfect example of how not to do business. Maybe Wal-Mart’s problems are bigger than households having less to spend. They are attempting to maintain their profit margins by reducing staff hours, hiring low quality people, and paying them shit wages. In the short run it may keep profits higher, but in the long-run customers will go elsewhere. Except most of the elsewhere stores closed up years ago when Wal-Mart arrived and underpriced them into bankruptcy.
My shopping experience at Giant is generally pleasant. The staff are nice, competent, and have been there for years. They know what they are doing and serve you with a smile. But their store is part of a worldwide conglomerate, so things have changed for the worse over the last four months. They renovated the entire store, creating bigger aisles and moving stuff around. That’s annoying, but after a while you figure out where they moved the stuff you want. The real negative change was the dreaded “Everyday Low Pricing”. This weasel phrase means you will be paying more. This is what the Apple idiot CEO – Ron Johnson – did at JC Penney. It put them on a rapid path to bankruptcy.
The weekly sale items at Giant have virtually disappeared. This has coincided with the drastic increase in beef, pork and fresh produce prices. Since “Every Day Low Pricing” went into affect our weekly grocery bill has gone up 20%. And I am buying far less beef and more chicken. In the past I would stock up on sale items and put beef, pork and whatever was on sale in our storage area freezer. Now I am stuck buying what we need that week. No bargains, just fully priced food items. Be forewarned, whenever you see a store announce “Everyday Low Pricing” you are getting screwed.

The Boos Begin in August & Bells Start Jingling in October

The desperation of Wal-Mart and most of the other mega-retail chains is no more clearly evident than in their relentlessly ridiculous acceleration of holiday marketing displays. I was flabbergasted when I saw Halloween candy, decorations and costumes in row after row BEFORE Labor Day at my local Wal-Mart. Selling Halloween candy two months before Halloween is idiotic and a sure sign of desperation. Retailers have run out of merchandising ideas. I wouldn’t even consider buying Halloween candy until the week before Halloween. Do Wal-Mart freaks of the week actually buy Halloween merchandise in September?

Holidays used to be special occasions that lent a sense of sales urgency for retailers for a week or two, to pump up sales. Now Wal-Mart and the rest of the dying retailers have Christmas, Easter, Fourth of July, and Halloween displays up for 80% of the year. There is no sense of urgency to buy. From September 1 though October 31 there are rows and rows of bags of corporate produced chemicals disguised as candy. I suppose the obese masses buy this crap in anticipation of Halloween, tell themselves they’ll only take one, and then shovel the entire bag down their gullets.
So last week, still a full two weeks before Halloween, Wal-Mart had already converted their entire garden center into a Christmas wonderland of cheap mass produced Chinese cookie cutter Christmas decorations and lights that will blow out after three hours of use. They had also converted aisles at the front of the store to Christmas displays. Who the hell shops for Christmas crap in October? There is nothing like having cheap Chinese Christmas crap available for over two months to create a sense of urgency to buy. Wal-Mart and the rest of the mega-retailers have got nothin. They have no original merchandising ideas. They don’t even try anymore. They source low quality goods from China and compete solely on price. I can’t wait for the Easter candy to appear on Wal-Mart’s shelves in late December.

Black Thanksgiving

Black Friday is dead. Long live Black Thanksgiving. The riots and stampedes by the ignorant masses for toasters and HDTVs on Black Friday are now being replaced by retailers and malls across America opening at 6:00 pm on Thanksgiving. It actually seems fitting. How better to give thanks for our mass consumption, debt financed, materialistic, iGadget addicted society than to open stores on Thanksgiving. Spending time with family is overrated anyway. If you had to spend six hours with cousin Eddie and aunt Bethany, you’d be looking forward to an early opening at Macy’s.
The bullshit message from the mega-retailers is: “We’re not opening on Thanksgiving out of desperation or greed. We’re doing it simply to satisfy the demands of our customers”. It’s a racist national holiday anyway. We should be going to an Indian run casino on Thanksgiving to make up for our past sins. Opening stores and forcing workers to work on Thanksgiving is pathetic, disgusting and a truly desperate measure in this consumer empire in decline. The law of diminishing returns has been invoked upon the mega-retailers that dominate our suburban sprawl paradise.
These retailers can start holiday merchandising three months before the actual holiday. They can open their doors on Thanksgiving, Easter and Christmas. It’s nothing more than shuffling the deck furniture on the Titanic. We’ve allowed bankers, politicians and corporate titans to financialize our economy, gutting the once thriving middle class, sending manufacturing jobs overseas, and convincing the clueless masses that consumer goods purchased with debt is equal to wealth. But, we’ve reached the point of no return. There are 248 million working age Americans and 102 million of them are not employed. Of the 146 million working Americans, 82 million of them make less than $30,000 per year.

While retailers have added billions of square feet since 1989, real median net worth is 5% lower over 24 years. Retailers are attempting to get blood from a stone. The stone is in debt, approaching retirement with no savings and dead broke.

We have one entity that deserves the most credit for destroying the American Dream. Real median household income is lower than it was in 1989. The 2008 collapse was caused by the easy money bubble machine at the Federal Reserve. We had the opportunity to hit the reset button, implement rational economic and monetary policies, take our lumps, and make the banking culprits pay for their crimes. Instead, the easily manipulated masses believed the Wall Street storyline and allowed the Federal Reserve and feckless politicians to save the banking cabal with extreme money printing and debt creation. This has pushed the middle class closer to the breaking point, while further enriching the oligarchs. The Federal Reserve saved their owners and lured the masses further into debt.

The Fed, Wall Street, and Washington DC have successfully driven consumer debt to an all-time high, blasting through the $3 trillion level. Declining real incomes and rising debt are a sure recipe for success.

Our entire economic paradigm is built upon desperate measures. Zero interest rates, $3 trillion of QE, systematic accounting fraud, fudged economic data, and doling out subprime loans to auto renters and University of Phoenix wannabes have failed to revive our moribund economy. Delusions don’t die easily. But they do die. We are reaching the limit of this delusionary dream built upon debt, denial, and deception. Make sure you wolf down that Thanksgiving feast before 5:00 pm. There are HDTV’s to fight for at 6:00 pm.

Another Deutsche banker and SEC enforcement attorney ‘commits suicide’

Back on January 26, a 58-year-old former senior executive at German investment bank behemoth Deutsche Bank, William Broeksmit, was found dead after hanging himself at his London home, and with that, set off an unprecedented series of banker suicides throughout the year which included former Fed officials and numerous JPMorgan traders.
Following a brief late summer spell in which there was little if any news of bankers taking their lives, as reported previously, the banker suicides returned with a bang when none other than the hedge fund partner of infamous former IMF head Dominique Strauss-Khan, Thierry Leyne, a French-Israeli entrepreneur, was found dead after jumping off the 23rd floor of one of the Yoo towers, a prestigious residential complex in Tel Aviv.
Just a few brief hours later the WSJ reported that yet another Deutsche Bank veteran has committed suicide, and not just anyone but the bank’s associate general counsel, 41 year old Calogero “Charlie” Gambino, who was found on the morning of Oct. 20, having also hung himself by the neck from a stairway banister, which according to the New York Police Department was the cause of death. We assume that any relationship to the famous Italian family carrying that last name is purely accidental.
Deutsche Bank
Here is his bio from a recent conference which he attended:
Charlie J. Gambino is a Managing Director and Associate General Counsel in the Regulatory, Litigation and Internal Investigation group for Deutsche Bank in the Americas. Mr. Gambino served as a staff attorney in the United Securities and Exchange Commission’s Division of Enforcement from 1997 to 1999. He also was associated with the law firm of Skadden, Arps, Slate Meagher & Flom from 1999 to 2003. He is a frequent speaker at securities law conferences. Mr. Gambino is a member of the American Bar Association and the Association of the Bar of the City of New York.
As a reminder, the other Deutsche Bank-er who was found dead earlier in the year, William Broeksmit, was involved in the bank’s risk function and advised the firm’s senior leadership; he was “anxious about various authorities investigating areas of the bank where he worked,” according to written evidence from his psychologist, given Tuesday at an inquest at London’s Royal Courts of Justice. And now that an almost identical suicide by hanging has taken place at Europe’s most systemically important bank, and by a person who worked in a nearly identical function – to shield the bank from regulators and prosecutors and cover up its allegedly illegal activities with settlements and fines – is surely bound to raise many questions.
The WSJ reports that Mr. Gambino had been “closely involved in negotiating legal issues for Deutsche Bank, including the prolonged probe into manipulation of the London interbank offered rate, or Libor, and ongoing investigations into manipulation of currencies markets, according to people familiar with his role at the bank.”
He previously was an associate at a private law firm and a regulatory enforcement lawyer from 1997 to 1999, according to his online LinkedIn profile and biographies for conferences where he spoke. But most notably, as his LinkedIn profile below shows, like many other Wall Street revolving door regulators, he started his career at the SEC itself where he worked from 1997 to 1999.

13 European Banks Don't Have Enough Money To Survive A Financial Crisis

Euro burning ecb 
In this Nov. 3, 2011 file photo, activists of the Occupy Frankfurt movement have set up a fire near the Euro sculpture in front of the European Central Bank in Frankfurt, Germany.
The European Central Bank said on Sunday that 25 eurozone banks showed a capital shortfall, after a year-long review of finances for 130 of the largest banks in the euro area.
The assessment goes through Dec. 31, 2013. Since then, 12 of the 25 banks have already covered their capital shortfall, which totals €25 billion, the ECB said. That means 13 banks still do not have enough money to whether a financial crisis.
The banks with existing shortfalls, which have not been named, now have two weeks to submit plans to the ECB detailing how the firms plan to raise capital. The banks will have nine months to cover the shortfall, the ECB said.
Out of the 25 banks, Cyprus, Greece, Portugal, and Italy have the proportionally highest shortfall, the report said. You can see Italy leads the pack in the pie graphs below.
ECB Stress Tests
In a statement, the ECB said, “By identifying problems and risks, [the review] will help repair balance sheets and make the banks more resilient and robust. This should facilitate more lending in Europe, which will help economic growth.”

Tuesday, October 14, 2014

When Poverty Was the Enemy, Not the Poor

The poverty rate in the US would be 15 percent higher if not for the War on Poverty and government anti-poverty programs since 1967.
Tom Eblen
It has been 50 years since America launched the War on Poverty. The Economic Opportunity Act and legislation to outlaw racial discrimination were the centerpieces of President Lyndon B. Johnson’s vision to create a Great Society.
Today, rather than a war on poverty, we seem to have a war on the poor. Wealth inequality is growing. State support for education is withering. Social safety-net programs are under attack in Congress. Many Americans believe that if people are poor, it’s their own fault. The only “solution” for poverty that many people advocate is allowing companies to create jobs offering wages too low to support a family.
Although it is now widely—and inaccurately—portrayed as a costly welfare program, the War on Poverty was not a failure. If not for government anti-poverty programs since 1967, the nation’s poverty rate would have been 15 percentage points higher in 2012, according to a study published recently by the National Bureau of Economic Research.
For the many Americans committed to fighting economic injustice, the War on Poverty offers some valuable lessons. It showed what can work—and what is still working. It can even work in some of America’s poorest places, such as the Appalachian Mountains of Eastern Kentucky where Johnson traveled in 1964 to launch his “war” from the front porch of a poor laborer’s cabin.
As a young adult, Robert Shaffer accompanied his father to the March on Washington for Jobs and Freedom in 1963 and was inspired to action by Martin Luther King Jr.’s “I Have A Dream” speech. Shaffer went home to New Jersey and started organizing poor people to push for economic justice.
His work soon attracted the attention of the new Office of Economic Opportunity (the OEO). But Shaffer wanted to work on the front lines, not in some Washington cubicle. He had read Harry M. Caudill’s 1962 book, Night Comes to the Cumberlands, which chronicled the poverty, economic injustice, and “desperation of the spirit” in an Eastern Kentucky controlled by coal companies and absentee landowners. Shaffer told federal officials, “I’ll take the job if you’ll send me to Kentucky.”
The Economic Opportunity Act required the “maximum feasible participation of the poor” in decisions about the use of federal development money. But many state and local politicians and business leaders in Kentucky saw that kind of power-sharing as a threat, and they ignored the requirement. In one example, the federal government took back a major grant from the eight-county Cumberland Valley Community Action Agency because it refused to give poor people a voice. The OEO sent Shaffer to Kentucky as a special technical assistant to reorganize the agency so funding could be restored.
“Those who lost control of the grant funds resented the new agencies,” said Shaffer, now 84 and living in Berea, Ky. “Those people weren’t used to somebody else having money to work with that they didn’t control. Sometimes it was a pretty hostile environment.”
Later, with federal money and diverse local leadership, Cumberland Valley and other community-action agencies in Kentucky achieved notable successes. They leveraged social services to create businesses, taught job skills to poor people, and created small construction firms and manufacturing companies owned by their workers. Among those companies’ products: handmade crafts, upholstered furniture for Sears Roebuck & Co., and high-end dresses for Laura Ashley, Inc.
“Before long, products being produced in some of the poorest counties in the nation were being sold in fine stores in New York City, Dallas, Chicago,” Shaffer said. Unfortunately, many of those companies later went under after free-trade agreements sent manufacturing jobs overseas to low-wage countries.
“There’s a difference between welfare and economic opportunity,” Shaffer said. “And, to me, that’s the exciting thing about what we experienced here. We were using social services for economic development and ownership.”
Shaffer worked closely with Hollis West, one of most successful community action agency leaders in Eastern Kentucky. He was also one of the most controversial because of his confrontations with the bosses who controlled the poor mountain counties. At their behest, Gov. Louie B. Nunn tried to get West fired.
“These programs helped get a generation of families jobs,” said West, now 83 and living in Lexington, Ky. “We just had to find ways to get all sides working together.”
Their experiences showed them anti-poverty programs work best when poor people are involved in policy decisions. “You’re never going to change the culture of Appalachia until you have a legitimate organization of the poor and their allies,” Shaffer said. “The majority of the people in the mountains are just as capable as anyone else if they have the same education and economic opportunities as anyone else.”
Johnson’s passion for ending poverty was not shared by his successor, Richard Nixon. By the early 1970s, the Nixon Administration had killed or neutered many War on Poverty programs.
Shaffer said he and other special technical assistants from around the country were called back to Washington in 1971. The OEO was then headed by Donald Rumsfeld, who, as Secretary of Defense three decades later, would oversee the war in Iraq. “They said, ‘You’ve been doing a wonderful job, you’ve accomplished a lot of good things … but we cannot expand the program so we’re going to terminate it,’” Shaffer said.
But one organization that Shaffer and West were instrumental in creating in 1968 survived. Originally called Job Start, it is now Kentucky Highlands Investment Corp., based in London, Ky. It grew under the leadership of Thomas Miller, who moved Kentucky Highlands into the venture capital business in 1972. The mission has expanded even more under Jerry Rickett, the director since 1989. Kentucky Highlands says it has helped create more than 18,000 jobs in the region since 1968 by providing more than $275 million in public and private financing to more than 625 businesses. The result: $2.1 billion in wages and salaries and $400 million in tax revenues.
“You’ve got to have a job if you want to overcome poverty,” Rickett said. “That’s what this company has always been about.”
The coal industry, which for more than a century created an almost colonial economy in the mountains, has been cutting jobs for three decades. Decades of state government efforts to attract large corporate employers from outside the region have resulted in few jobs that pay more than minimum wage. It has largely been a top-down effort.
But Kentucky Highlands focuses on home-grown entrepreneurship: training people who have the aptitude and helping them get capital to start and grow businesses. The capital comes from government grants and loans, private foundations, and, increasingly, banks and other private investors.
Kentucky Highlands also partners with dozens of other organizations on projects. A recent focus has been building about 25 energy-efficient houses a year for low- and moderate-income families and helping with a state initiative to expand broadband infrastructure so people can take advantage of information-economy jobs. Kentucky ranks 46th nationally in broadband coverage with 23 percent of the state’s residents, primarily in Eastern Kentucky’s mountains, having no online access.
After leaving Kentucky highlands in 1981, Miller went on to work in economic and community development in San Francisco, Tennessee, New York, and Africa. But when it came time to retire, he moved to Berea, where he continues to advocate for more effective Appalachian development strategies. Kentucky Highlands is doing the right things, he said, but it will never be big enough.
In the 1990s, the Clinton-era Empowerment Zone program brought Eastern Kentucky $40 million in tax breaks and loans, some of which still fund a $13 million revolving loan fund that Kentucky Highlands says has leveraged $120 million in private investment.
Miller thinks a new, massive infusion of investment capital is needed, an Eastern Kentucky Venture Fund of at least $250 million organized by successful business leaders from across Kentucky. The region also needs more trained entrepreneurs who know how to use that money to grow and diversify the economy.
“There are no silver bullets,” Miller said. “It’s probably a 50-year strategy, at best, and the first 10 years aren’t going to be pretty. But we know that this investment strategy works in Eastern Kentucky, that betting on the people here is the thing to do.”
Like other parts of the Central Appalachian coalfields, Eastern Kentucky remains one of America’s poorest places, with high unemployment, drug abuse, and other social problems that grow out of joblessness. But substantial progress has been made—in living conditions, educational attainment, health care, and infrastructure. And what set that progress in motion was the War on Poverty.
“Dad worked in the coal mines and did other jobs. He was a very hard worker, but he didn’t have an education,” said Darlene Sharp, 61, who was a teenager with six brothers and sisters when the War on Poverty came to Knox County. Her father managed buildings that housed the new educational programs, and her mother got a job at one of the factories West helped create. “A lot of people worked there,” she said. “I’m sure that every one of them was people who had no employment before. Without the programs, there weren’t very many jobs. It helped them be able to take care of their families and meet needs. I know it helped my family.”
At its core, the War on Poverty was not about a handout, but a hand up. It was about creating economic opportunity and giving poor people the skills and support they needed to take advantage of it. And it was about giving poor people a voice in decisions affecting their lives. A half-century ago, Americans made a commitment to fight a war on poverty, and we could do it again. Creating a society that is more fair, just, and prosperous for everyone is a fight worth winning.
This piece was reprinted by RINF Alternative News with permission or license. 

Yes, CEOs are ludicrously overpaid. And yes, it's getting worse

These charts show how the richest are pulling away from the rest

A large computerised display of the British FTSE 100 index is pictured in London
Nice work if you can get it: FTSE 100 CEOs have seen huge pay increases Photo: AFP
A new report produced by the TUC claims that we're in the middle of the worst pay squeeze since the 1860s, with real wages falling for the seventh year in a row. Not the best time for another report, by Incomes Data Services, to show that FTSE 100 directors have received a bumper 21 per cent pay increase over the past year. While their actual salaries only rose by 2.5 per cent, rising share prices and juicy bonuses saw their median pay packet reach £2,433,000. The typical CEO now rakes in £3,344,000, or 120 times more than the average UK worker.
The chart below, taken from the IDS report, compares the wages of the highest-paid director of each FTSE 100 company (which usually means the chief executive) with the average UK salary. It shows how, since 2000, bosses' salaries have increased almost six times more quickly than their workers'. (Pay packets at smaller companies, in the FTSE 350, have also risen much faster than ordinary wages, but not quite as spectacularly.)
Can such pay packets possibly be justified? Even for those of us on the free-market end of the spectrum, it's very hard to see how. You can make the argument that these executives are part of a global marketplace for talent, that the international focus of the FTSE means it's relatively unmoored from the UK economy per se, or that the companies themselves have become larger and more profitable and their managers are reaping their just rewards.
But none of these arguments quite holds up. If you take the salary data for those FTSE 100 chief execs, and ask a Bloomberg terminal for the total revenues and profits of the companies they run over the past few years, you see that CEO pay has massively outpaced anything with which it can possibly be correlated - let alone the FTSE 100 Index itself, which is the blue line on the bottom.

What’s Really Killing the World Economy

Turns out forgiveness can be a virtue when it comes to easing hard economic times, as well as other areas of life.
The world economy is still stumbling, Paul Krugman writes in his column today. Recovery is stalling. “If this story sounds familiar, it should; it has played out repeatedly since 2008,” Krugman writes, somewhat depressingly. “As in previous episodes, the worst news is coming from Europe, but this time there is also a clear slowdown in emerging markets — and there are even  warning signs in the United States, despite pretty good job growth at the moment.”
Then he sets out to answer this question of why things areso bad. After all, we are many years past the housing bust and banking crisis, i.e., the causes of the Great Recession.
The sad truth is that the ongoing economic hardship around the word is and perhaps still is avoidable, in Krugman’s view. It is the result of a series of policy mistakes: “Austerity when economies needed stimulus, paranoia about inflation when the real risk is deflation, and so on.”
Next question, then, why do governments keep making these mistakes?
The answer, Krugman posits, is misplaced righteousness, overzealous moralizers intent on continuing to punish debtors even if doing so drags everyone down. Here is the background: Before the crash, credit was exploding. “Old notions of prudence, for both lenders and borrowers, were cast aside,” Krugman writes. “Debt levels that would once have been considered deeply unsound became the norm.

Suddenly, We Have Problems

by John Rubino
A rising stock market, like a rising tide, can cover a multitude of interesting and/or scary things. The thinking seems to be that if the finance guys who really know what’s going on are buying, then the disturbing stories that lead each evening’s news must be manageable. So, in general, we’re okay.
But let the market fall a bit and those headlines suddenly begin to seem both oppressive and really, really numerous. And maybe we’re not okay after all. To take just a few of the issues that, in the wake of the recent equity correction, now loom large:
Islamic State, the tiny band of religious crazies that the US armed to do its bidding in the Syrian civil war is now threatening to take Baghdad, capital of Iraq and home to a US embassy that will live forever in the annals of hubristic excess. Actually a small, self-contained city, the embassy contains all kinds of sensitive equipment, documents and personnel, and will be defended with (thousands of) boots on the ground if an Islamic State victory appears imminent — which it now seems to be. In other words, we’re getting ready to dump another trillion or so dollars into the hole where we previously dumped two trillion with nothing to show for it but chaos.
Ebola, a nasty virus that was previously polite enough to stay in Africa, has escaped and is now touring Europe and the US. Either it has mutated to become more communicable or the West’s protocols for dealing with it are inadequate. Either way, there is now talk of the disease breaking free and causing a First World pandemic. See Ebola pandemic spreading across Europe is ‘unavoidable,’ WHO warns.
The strong dollar, meanwhile, has had the same effect on the world as would higher US interest rates, slowing growth and causing hot money to leave emerging markets and pour into US Treasuries. So while everyone is waiting for the Fed to raise interest rates and court the traditional “taper tantrum” liquidity crisis, the foreign exchange markets have done the heavy lifting already. See Why a strong dollar is scarier than taper tantrum.
Japan and Europe are dropping into recessions that could easily become system-threatening depressions. While US stocks were rising it was possible to view America as an island of stability in a chaotic world. But when US stocks start to fall it’s much easier to envision an interconnected world where everyone feels everyone else’s pain. Which is the accurate viewpoint, because who will buy our stuff — including the bonds that finance our deficits — if the other major economies grind to a halt?
Junk bonds, typically a canary in the financial-bubble coal mine, began selling off in September, just as the dollar started to spike. This was also easy to ignore while equity prices were rising, but now looks like the first of many dominoes to fall in a financial panic.
And it’s October! All of the above happening simultaneously would be scary anytime, but coming in the month when some of the most dramatic stock market crashes have for some reason occurred, this must feel like deja vu all over again for folks with a sense of financial history.
It’s impossible, of course, know whether something is a crisis until it becomes one. So this might turn out to be nothing more than a hic-up in the permanent new normal of ever-rising financial asset prices. We’ll know soon enough.

Counterfeiting Trillions of Dollars in US Treasury Bonds And Other Crimes.

A week ago I noticed that the Treasury published our total increase in Treasury bonds for the past year. It had grown by $1,085,888,854,036.50. Some people mistakenly think that this is the Treasury deficit. Not quite. They have not accounted for the privilege certain Too Big To Jail Banks have which is that one or more of them is allowed to counterfeit US Treasury bonds and pocket the cash.
The Treasury deficit is calculated the old fashioned way. You take federal expenses and subtract revenues. The total Treasury deficit for 2013 cited by Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013 was $680 billion.
If you subtract the Budget deficit from the total number of Treasury bonds sold you have: $1,085,888,854,036.50 minus $680 billion which  equals $405,888,854,036.50.
So the Bankers are allowed to take more than $405 billion a year from you because they can counterfeit Treasury bonds. The Federal Reserve has 21 primary dealers who handle Treasury transactions through the New York branch of the FED.
Is there any evidence that there are large amounts of fake Treasury bonds floating around? Yes. There is. There is a rather intriguing story from June 2009 about two Japanese men headed to Switzerland who were detained in Italy with 134 billion dollars in US Treasury bonds. The bonds turned out not to be genuine according to the US Treasury. It is illegal to possess counterfeit securities, but the men were sent back to Japan without being charged. Bloomberg did a story a few days later saying this was merely bizarre news.
Dr Jim Willie said the primary dealers and the New York Federal Reserve sold $2.2 trillion in counterfeit Treasury bonds from the Clinton era and another $1.5 trillion more in bonds than the deficits required over the 45 months after 911. So far no politician has done anything to stop this organized counterfeiting.
When the Federal Reserve was created in 1913, Bankers were given the right to charge us interest on money they created out of nothing. If we had a non-interest bearing debt free currency like Lincoln’s Greenbacks, there would be no National Debt and no interest paid on that debt. There ought to be no Treasury bonds and no interest on the debt.
The Bankers have been given a license to steal from you in other areas. Some might remember the controversy of the bullion banks being allowed to lease gold at a very low interest rate and then to sell it five times as a paper certificate.  Various countries like Germany and the Netherlands have asked for the return of their gold that had been on deposit in New York and London. The US said it would take 7 years to return Germany’s gold. To date the US has returned 5 tons of gold out of 1,500 tons on deposit. Dr Jim Willie has estimated that there are at least 20,000 tons of paper certificates for gold on deposit at bullion banks for which there is no corresponding bullion.
Bankers have other means of stealing from you. Catherine Austin Fitts says they stole $40 trillion from you.
Catherine was US Housing Commissioner in the first Bush administration. She said she found one block in San Diego that had lost $20 million in HUD loan guarantees made on properties that never existed and did not even have postal street addresses.
On March 22, 2000 Susan Gaffney, Inspector General of Housing and Urban Development, testified before the US House of Representatives that she had to adjust the books 284 times and write off $77.2 billion for the fiscal years 1998 and 1999. A Congressman asked her if she did anything other than adjust the books. She said she did nothing other than adjust the books meaning she did not even bother to recover the stolen money. The Congress has rather low standards when it comes to protecting you from organized theft by Wall Street.
On September 10, 2001 Donald Rumsfeld said he could not trace $2.3 trillion in Department of Defense spending. He promised to do a better job in the future. The future is Now and DOD accounting has not improved. Rabbi Dov Zakheim was the Comptroller of the Pentagon under Rumsfeld. It was his job to find the missing trillions. On the morning of 9-11-2001 the auditors tracing the missing money died. Also on 911 the records that could prove the existence of 2.2 trillion dollars in counterfeit Treasury bonds that had been sold in the Clinton years was destroyed at Cantor Fitzgerald’s offices at One World Trade Center on the 101st to 105th floors. The Securities and Exchange Commission had an office in World Trade Center Tower 7 that had evidence against the Wall Street firms who could have been sued over their fiduciary responsibilities for the ENRON bankruptcy.  Too bad all the evidence for the $2.2 trillion in counterfeit Treasury bonds and billions in the ENRON case went up in smoke on 9-11-2001.
Two American financial reporters, Stacy Herbert and Max Keiser, reported the results of their interviews with Bankers in Dubai. The Bankers told them that American military contractors who opened bank accounts in Dubai did so with all cash deposits averaging $2.5 million.There have been consistent reports that the US Department of Defense has let out contracts for buildings, bridges and other projects that are blown up by ‘terrorists’ as soon as they are complete thus allowing the contractor to build another bridge to nowhere.
Afghanistan and the world are awash in opium. I read an interview with an American veteran who had been a sniper. He was told to take out anyone going over his assigned mountain pass except for the man transporting the opium. And you wonder why America is still in Afghanistan and is negotiating to keep a military presence there.
This opium war diplomacy has been a long standing tradition. President Nixon appropriated millions over a period of years to pay Turkish farmers to stop selling their opium illegally because their sales were to the French Corsican mobs. Those men were in competition with the CIA which was bringing heroin into the US from Vietnam and Burma. One of the three reasons for killing President Kennedy was the desire to get white Americans hooked on drugs.
Vietnam was America’s First Opium war and Afghanistan was its second. The Too Big To Jail Bankers launder a trillion dollars in illegal weapons and drug money. The Bankers also launder $500 billion a year in political bribes. The CIA flies drugs into the US by the plane loads which it sells to its favored Street Gangs. These gangs according to the FBI had been growing at 40% every four years. America’s Open Borders have increased the growth of those gangs by allowing juveniles with Gang Tattoos to enter the country along with adults who have criminal records. This should mean we will surpass the 2 million Gang Members mark some time in 2015.
The Mexican Drug Cartels, some of whom work with the CIA, have already put American cops on their Death Lists. The Cartels obviously are waiting to cross names of their Death Lists as soon as they have added sufficient numbers to their armies inside the US. No point in risking a closing of Open Borders by prematurely killing the most honest and courageous cops in America. They plan to systematically go down that List until the honest cops are either dead or retired.
The elite Bankers think America suffers from ‘Excessive Democracy.’ Two million Drug Gang members will eliminate what little remains of America’s democratic traditions. Zach Taylor, the former Border Patrol supervisor, had access to US intelligence reports. He said that the Russian gangs are working very closely with the Mexican Cartels. What he did not say was that the Russian Gangs are Jewish.
The Mexican government works very closely with the Drug Cartels and the CIA. The Mexican Drug Wars have have killed 130,000 people. The Mexican government, the CIA and the favored Drug Gangs like the Sinaloa Cartel are not willing to share the drug profits with some 300 other smaller gangs.
Americans should take a long hard look at what the Cartels are planning for America. This is known to the federal government but that has not yet convinced them to end the disastrous Open Borders policy.
Some have speculated what Wall Street will do to change the dynamic of American politics now that we can be certain that the Federal Reserve and the rampant corruption will send this current Depression into the worst one in 500 years. The Bankers dealt a serious body blow to America’s ‘Excessive Democracy’ in 2001 when they they let Israel take down World Trade Center Towers 1,  2 and 7 with controlled demolitions. This allowed them to pass the Patriot Act, the John Warner Defense Authorization Act, The Military Commissions Act and the Nation Defense Authorization Act of 2012 and to militarize US domestic police.
They have already started doing what they plan to do in their Endgame. Ebola was, in my opinion and that of many others, a manufactured disease that enabled the City of London, Wall Street and Parisian Financiers to do what they have been doing for hundreds of years which is to exploit Africans. Ebola makes the governments of the Dark Continent extremely weak so Bankers can rob Africans of their immense natural resources.
90% of the ships used to transport African slaves to the New World were owned by Jews. When the working and middle class whites demanded an end to slavery, the Bankers replaced it with the even more profitable drug trade.
What white Americans have yet failed to realize is that the Bankers have no more regard for them than they do for Africans. Ebola has been reengineered to  give it a longer period of transmission. In the old days it killed people before they could spread it. Now the new and improved version of Ebola is Coming to America and to Europe. The Tory government of Britain and the Socialists in France have blocked direct flights from the Ebola infected countries since late August. Not so for America. Ebola and Enterovirus D68 seem to be doing great harm to America’s medical system. Given time they will be more devastating than Obamacare.
When the Dollar Dies and the economy crashes, Ebola will stop people from gathering in large crowds. This will prevent mobs of people with pitchforks from chasing down the Brokers and the Bankers of Manhattan. Ebola will also give a Greenlight to Disappearing the American resistance movement. I have said before that the federal government has a plan to Disappear 8 million Americans. That could only be attempted if there were a plague to cover it up. If they can give you s drug that makes you believe a false Ebola diagnosis, they can give you the real thing when you get to their concentration camps.
I do not expect a widespread plague until the US starts a mandatory Ebola vaccination program early in 2015. If you have read modern history, you would know that polio vaccinations infected more people than did the live virus. And the polio vaccination was intentionally loaded with contaminants according to the writings of Ed Haslam and Judyth Vary Baker.
I do not think this plan will work even if the elite can release another plague and successfully blame it on ISIS. Too many people know that ISIS is Al Qaeda of Iraq. It was trained, armed and funded by Obama. Edward Snowden told us that ISIS is run by the Mossad. Too many people inside the government will balk when they see engineered plagues killing their countrymen.
I would hope the military and others inside the government will say No.
Related Articles:
Video: The Sinaloa Mexican Drug Cartel Is A CIA Subsidiary
Screw Up: 8 Million Americans Are On The List To Be Disappeared
If ISIS is a Bomb, Israel is the Bombmaker
Resurrecting Israel Did 911. All the Proof In The World
This is the famous interview with Dr Jim Willie by Max Keiser

Systemic COLLAPSE as Fed Policy Causes Extreme Stock Market Moves!

S&P Warns: Athens Nearing Default, Again
Putin Rules Out Capital Controls as Russian Outflows Grow
For A Reminder Of What Inflation Does To Your Money, Check Out The ‘Cost Of Living’ In 1938
Q2 earnings is consistent with the rebound/slowdown recovery that has been the hallmark of the economic cycle following the financial crisis.
Jobs added by industry
Obama administration

Saudi Arabia's "Oil-Weapon" Hits Europe

Source: Zero Hedge

We first exposed the "secret" US-Saudi deal in September which led to the inevitable bombing of Syria. We then progressed to explain the quid pro quo of the deal in lower oil prices (benefiting US consumers into an election and crushing Russian revenues). In today's Wall Street Journal we get the final piece of the puzzle as it is clear that what Saudi Arabia loses in 'price' it will make up in 'volume' as The Kingdon is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. Simply put, "they are threatening [European] buyers" to discontinue sales if they don't agree with the full fixed deliveries. The 'oil weapon' grows stronger...
As The Wall Street Journal explains,
Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say.
The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude.
“The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They are using very aggressive tactics” in Europe too, the trader added.
This month, state-owned Saudi Aramco stunned the rest of the Organization of the Petroleum Exporting Countries by slashing its November prices to defend its market share in Asia’s growing market. The move, setting a price war in the oil-production group, was combined with a boost in the kingdom’s output in September.
But Riyadh is also moving to protect its sales to Europe, a declining market where it is facing rivalry from returning Libyan production.
After cutting its November prices there, Saudi Aramco is also asking refiners to commit to full, fixed deliveries in talks to renew contracts for next year, the traders say. They say the Saudi oil company had previously offered a formula allowing flexibility of more or less 10% of contracted volumes, the most commonly used in the industry.
“They are threatening buyers” to discontinue sales if they don’t agree with the fixed deliveries, another trader said.
*  *  *
Of course, the more pressure ths US (prxied by Saudi Arabia) puts on Russia (and Iran) and implicitly Europe now (as they are forced to buy 'more' oil than needed, albeit at lower prices - but leaving their budgets bursting still further), the more the rest of the world is forced to consider alternatives to US hegemony and side with those that, for now, have not reached peak totalitarianism.

Oil Price War Throws the Fed into Crisis Mode

By Pam Martens and Russ Martens: October 13, 2014
OPEC Headquarters in Vienna, Austria
OPEC Headquarters in Vienna, Austria
It was only a matter of time until the evidence became irrefutable that the only way out of a global deflation on the order of the Great Depression was to address the fact that 571 U.S. billionaires simply don’t have enough hours in the day to spend adequate money to buy enough goods that would require the restocking of shelves, create new factory orders and thereby ramp up job hiring to keep a nation of 317 million people afloat.
A nation where the top 10 percent reaps more than 50 percent of the income is doomed to end up in the quicksand of deflation, dragging down the rich along with everyone else. The Federal Reserve’s timidity to address this reality since the crisis of 2008, as the national debt ballooned and its own balance sheet quadrupled, has now put it in a dire pickle at a most inopportune time.
The Fed has attempted to assure the world that things are so dandy here in the “Goldilocks economy” that its biggest focus is when it will raise interest rates to keep the economy from overheating and keep inflation in check. That thesis has been quite a bit of a stretch with 45.3 million of its fellow citizens living in poverty and a labor force participation rate of 62.7 percent – a data point that has been steadily getting worse since the financial crisis in 2008.
A key component that has allowed both the Fed and Congress to keep from taking strong measures to address a looming deflation has been the price of crude oil. Because oil impacts everything from transportation costs that inflate the price of food and other products to the cost of an airline ticket or heating a home, the high price of this commodity has, to a degree, masked the growing deflation threat.
Now the mask has been removed. Oil prices are in freefall and an oil price war has broken out among OPEC members, raising the specter of 1986 when oil prices fell by 50 percent in just an eight month span. A serious global slowdown has effectively turned the oil cartel, OPEC, into a beggar thy neighbor band of go-it-alone dealmakers who hope to sign individual contracts with customers and grab market share before prices decline further.
Earlier this month, Saudi Arabia’s state-owned oil company, Saudi Aramco, cut its official crude price by $1 a barrel for November deliveries to its Asian customers. It also dropped pricing by approximately 40 cents a barrel to U.S. and European customers. According to OPEC data, “Saudi Arabia possesses 18 per cent of the world’s proven petroleum reserves and ranks as the largest exporter of petroleum.” As the world learned in 1986, if Saudi Arabia wants to start a price war to assert its dominance, it has both the resources and production capability on its side.
According to a report from Bloomberg News, Iran is now offering oil discounts similar to Saudi Arabia. The situation is fraying nerves in countries dependent on oil revenues with Venezuela calling for an emergency OPEC meeting prior to its regular meeting slated for November 27.
Before the latest news of OPEC’s disarray sent oil prices plunging, the Fed was already expressing some concerns about the low rate of inflation. Its minutes for the Federal Open Market Committee (FOMC) meeting of September 16 – 17, 2014 included the following:
“Total U.S. consumer price inflation, as measured by the PCE [Personal Consumption Expenditures] price index, was about 1½ percent over the 12 months ending in July.  Over the 12 months ending in August, the consumer price index (CPI) rose about 1¾ percent…
“The staff continued to project inflation to be lower in the second half of this year than in the first half and to remain below the Committee’s longer-run objective of 2 percent over the next few years. With longer-term inflation expectations assumed to remain stable, resource slack projected to diminish slowly, and changes in commodity and import prices expected to be subdued, inflation was projected to rise gradually and to reach the Committee’s objective in the longer run.”
In other words, a sudden, sharp drop in inflation expectations caused by an oil price war raging around the globe was not present in the Fed’s crystal ball just a month ago. But it should have been: other commodity prices have been sending up red flags for some time now. As we reported on September 24, just one week after the Fed’s September meeting:
“Iron ore has now slumped 41 percent this year, marking a five-year low. In just the third quarter the price is off by 15 percent, suggesting the trend remains in place. This week the price broke $80 a dry ton for the first time since 2009.
“Agricultural commodity prices are also confirming the trend with corn off 22 percent since June and wheat down 16 percent in the same period. Soybean prices are down 28 percent this year to the lowest in four years.
“Deflationary winds blowing in from Europe, cooling economic growth in China, together with the question of just how disfigured the stock market has become as a result of $1.09 trillion propping up the S&P 500 through corporate buybacks in the last 18 months, all signal one word for the average investor: caution.”
Another key gauge of inflation expectations, the 10-year U.S. Treasury note, has been telling the market for some time that deflation was far greater a worry than inflation and that the Fed’s thesis of hiking interest rates next year had all the staying-power of a snow cone in July.
The 52-week high in the yield of the 10-year Treasury note was 3.06 percent. This morning, it is yielding 2.28 percent. That’s not the behavior of an interest-rate benchmark anticipating heated economic growth in the U.S. or an interest rate hike by the Fed.
The market has delivered epiphanies to the Fed on multiple fronts – some of them blazing with sirens – but the Fed seems to have had its head in the sand just as securely as it did heading into the 2008 crisis.
The problem for the Fed, which has already quadrupled its balance sheet to over $4 trillion to sustain a less than 2 percent inflation rate while keeping interest rates in the zero-bound range, is that its monetary arsenal loses its firing power with the onset of deflation, should it occur.
Deflation boosts the value of holding cash and deferring purchases. The thinking goes like this: the longer you wait to buy, the cheaper the house or product becomes, effectively raising the value of the cash you hold. Conversely, if you spend your cash prematurely, the product or investment you buy may lose future value as a result of the deflation, handing you a wealth loss. If enough people adopt that attitude and defer enough purchases, the deflationary spiral becomes self-reinforcing, as it did in the Great Depression.
Then there is the problem of the strong U.S. dollar. This hampers export growth for U.S. manufacturers because it costs more in local currencies to buy the product we are attempting to sell in foreign markets. A strong dollar can also accelerate deflationary trends by making foreign imports cheaper in the U.S. as a result of the increased purchasing power of our currency. This would further complicate the Fed’s ability to beat deflationary forces.
As Wall Street on Parade reported in December, the Fed prides itself on gathering intelligence from the marketplace, starting its day at 4:30 a.m. at the New York Fed and ending up around 6:30 p.m. with conference calls to the Federal Reserve Board of Governors in between. The growing fear is that the Fed is once again, like 2008, watching the market tick by tick but failing to see the larger, dangerous trends.
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