Thursday, October 1, 2015

BREAKING Questions About Leak at Federal Reserve Escalate to Insider-Trading Probe

It sure looks to me like "they" want to get Federal Reserve chair Janey Yellen.

WSJ is now reporting:
A high-profile investigation into a leak of sensitive information from the Federal Reserve in 2012 has escalated to an insider-trading probe led by a key market surveillance agency and federal prosecutors in Manhattan, according to people familiar with the matter.

The firm at the center of the probe, Medley Global Advisors put out a report, in advance of a Federal Reserve statement, with such specifics that were included in the statement that a reeks of a tip off from inside the Fed.

Here'e where things get interesting. Yellen has admitted that she met with Medley some time before the leak. Bloomberg reported in May:
Yellen also said that in June 2012 she met with an analyst from Medley Global Advisors, which published a report on deliberations of a September 2012 closed-door meeting of the Federal Open Market Committee, one day before minutes of the meeting were made public.
The Fed chair said she met with Medley analyst Regina Schleiger on June 11, 2012, “to hear her perspectives on international developments.”
In addition, the Fed chief noted that she could not have known about the September events reported in the Medley letter and added that she “did not convey any confidential information.”

Medley, an investment  advisory firm, is not co-operating with the investigation. It claims it is a news organization.

However, WSJ notes:
Traditional media firms are largely immune from insider-trading prosecution because even if they acquire private information, they publish it to a broad section of the public. But the government has no clear definition of what constitutes a media organization, in part because it is wary of being accused of infringing on the First Amendment.
Medley’s website refers to recipients of its research notes as “clients,” not readers or subscribers. It says the firm serves “the world’s top hedge funds, institutional investors, and asset managers” by delivering “unbiased intelligence on macroeconomic and political events by cultivating relationships with senior policy makers around the globe.”


6 Out Of 6 Fed Surveys Say US Is In Recession… Credit Crashes Most In 4 Years… For The First Time During This Business Cycle, The US Hasn’t Added A Single Manufacturing Job This Year

For the first time since 2009, all six major Fed regional activity surveys are in contraction territory. So, time to hike rates?

Charts: Bloomberg
Biotech Bloodbath Sends Stocks To Longest Losing Streak Since Lehman; Credit Crashes Most In 4 Years
For 2015… you get nothing!!
The quarter’s carnage:
  • Russell 2000 down 12.7% – worst qtr since Q3 2011
  • Dow down 8% – worst qtr since Q3 2011
  • Nasdaq down 7.9% – worst qtr since Q3 2011
  • S&P down 7.4% – worst qtr since Q3 2011
Not pretty:
For The First Time During This Business Cycle, The US Hasn’t Added A Single Manufacturing Job This Year
While the headline ADP print earlier today was modestly better than expected, at +200K, one of its components posted a surprising tumble: with 14,600 manufacturing jobs lost in August, this was the worst month for the US manufacturing sector since January 2010.

Where this data becomes more disturbing, and where it can be seen in full context, is when clustering the monthlies into full year buckets. It is here that the full impact of what is now clearly at least a manufacturing, if not yet service, recession can be witnessed.
As the chart below shows, according to ADP, for the first time this decade, the US hasn’t created a single manufacturing job for the entire year. In fact, it has lost some 6,600 jobs.
Brazilian Nightmare Worsens On Bad Budget Data, Record Low Confidence, Horrific Government Approval Ratings

China Stock Regulator Imposes Record Fines After Rout

China Stock Regulator Imposes Record Fines After Rout
China’s securities regulator has handed out at least 2.37 billion yuan ($370 million) in penalties this month, five times the total for all of 2014, as the government clamps down after a stock rout. Bloomberg’s David Ingles reports on “First Up.” (Source: Bloomberg)

In the hole: Report finds states hiding $1.3 trillion in debt

FranklinSlider Capitols 
Much is made of the federal government’s debt, but what about debt at the state level? It may not have reached such eye-poppingly high figures, but it’s still a matter of concern. In its sixth annual Financial State of the States report, the nonpartisan accounting group Truth in Accounting (TIA) took a full account of government assets and liabilities. It found that even though many states claim to have balanced budgets, state governments have in fact accumulated a combined debt of $1.3 trillion.
“As a CPA looking at government finances, I found they were not being truthful and transparent about their financial condition,” Sheila Weinberg, founder of TIA, told “For years, citizens have been told that their home state budgets have been balanced. If that were true, state debt would be zero and Taxpayer Burden would simply not exist.”
She argues the generally accepted accounting standards the government uses are flawed for two reasons. First, she suggests that Government Accounting Standards Board that controls how the standards are set is not as independent as it sounds. Second, she notes that the government always has the power to tax, which reduces the incentive for sound fiscal policy – because if and when it comes up against a wall, it can always tax its way out.
Watchdog reporters covered the report and looked at the ramifications for their states. Here’s a state-by-state snapshot of what they found:

Seeing red in the Green Mountain State

Vermont’s $3.2 billion in debt may not seem huge compared to many of its counterparts, but with its relatively small population, Vermont’s budget shortfall works out to $14,300 for every taxpayer.
“The most common budget trick involves excluding pension benefits from annual budgets, according to the report,” wrote Watchdog reporter Bruce Parker. “Financial officers keep those liabilities off their balance sheets because the expenses don’t have to be paid until state employees retire. By ignoring expenses incurred in the present but paid in the future, states can claim to be balancing their budgets. In reality, the costs are being shifted to future taxpayers.”
These accounting tricks mean states like Vermont are in for a rude awakening next year. Weinberg said 2015 will be the last year they are used nationally, as standards have changed. Next year, states will have to add their pension liabilities to their balance sheets, and in 2017, retiree health care liabilities will also be added to state balance sheets.

A fuzzy picture

In Mississippi, Watchdog reporter Steve Wilson found that his state’s taxpayers weren’t getting the entire picture of Mississippi’s financial health. The law requires the state legislature to send the governor a balanced budget, so in order to eke out more spending, the proposed budget uses certain accounting principles to show only $139 million of the pension fund’s liability.
In reality, however, the Public Employees’ Retirement System of Mississippi, the state’s defined benefit pension plan for most state, county and municipal employees, has $4.6 billion in liabilities.

shutterstock_68403097More trouble in the Northeast

Ranking just below Vermont and well below Mississippi in debt-per-taxpayer is Pennsylvania. The state neglected to list $53 billion on its balance sheets, ranking third among the 10 Northeast states in hidden debt. In total, the Keystone State’s debt works out to $15,600 per taxpayer, the 11th highest in the nation.
Watchdog reporter Andrew Staub explains how spending can get out of control but still remain largely hidden: “Much of that debt can be traced to retirement benefits, which represent more than 50 percent of state bills. The unfunded liabilities have accumulated, as the state promised billions of dollars in benefits to retirees without adequately funding them, according to Truth in Accounting.”

The New York exodus

New York State was another hefty spender with $77 billion in unfunded liabilities for an average of $20,700 per taxpayer – second highest in the Northeast. Watchdog Arena writer Nicholas Fondacaro noted that each taxpayer’s share could grow even larger if New York’s exodus of workers continues.

Not so sunny in Sacramento

When California Governor Jerry Brown released his spending proposal last June, the Los Angeles Times wrote that California’s budget was “flush with cash.” The state claimed it had cut spending by $6.6 billion from 2013 to 2014, but due to obfuscating by the aforementioned accounting methods, TIA found that California’s hidden debt actually amounts to $111 billion.

From bad to worst

At the bottom of the pack is New Jersey, which TIA ranks as the worst spender with $160 billion in debt, or $52,300 per taxpayer. Upon further investigation by New Jersey Watchdog, however, reporter Mark Lagerkvist noted that the report actually understates the debt, and the proper figure is actually $10 billion higher. The discrepancy stemmed from a new valuation in State Treasury records that found New Jersey’s responsibility for unfunded retiree and employee health benefits has increased to $65 billion.
Local governments in New Jersey have troubles of their own. “The $170 billion hole does not include the debts of New Jersey’s local government units, which face a collective shortfall of $50 billion for pensions and health benefits,” wrote Lagerkvist. “Nor does it encompass the bond debts and other liabilities of the state’s 21 counties, 565 municipalities and 610 school districts.”

Not all doom and gloom

Though the overall picture is bleak, the debt situation isn’t quite as troubling in some states. Nebraska’s financials, for example, are actually in decent shape. The state has $5 billion in liquid assets and $3 billion in bills, for a “surplus” of $2 billion — or $2,800 per taxpayer. Even though Nebraska’s pension funds are mostly funded, the report found that it still hides some debt, but it’s in a much more manageable position than any of the aforementioned states.

Is there any hope?

Even though 49 out of 50 states have balanced budget requirements (Vermont being the exception), TIA identifies 39 states that have dug “financial holes” for themselves, while only a handful currently run true budget surpluses. The first step in reforms of any kind is transparency, which TIA and have focused on providing in our coverage of state debt. Government has proven more responsive to the electorate and much more capable of reform at the state level, so there’s still an opportunity for many of these states to turn their financial situations around.
This entry was posted on Tuesday, September 29th, 2015 at 3:52 pm and is filed under Blog.

Why Global Deflation is Another Banker Lie

Published on Sep 25, 2015
Today, I will discuss how easily bankers spread propaganda and lies that are embraced as truth by the masses. If we were simply to use common sense and observation in our own daily lives, we would easily reject a lot of the banker lies that are being spread today to serve the banking agenda. In this video, I will discuss one of the most commonly accepted banker lies of global deflation.

THE BIEBER - Todrick Hall (#TodrickMTV)

Will the Fed Bring Interest Rates Below 0% to Save the Economy?

“Sweden’s Riksbank has cut its rates below zero”
“How Sweden’s negative interest rates experiment has turned economics on its head – Telegraph”…
“How Sweden’s negative interest rates experiment has turned economics on its head – Telegraph”…
“Fed’s Evans: Later rate hike better for economy”…
“20150928_IPO_1.jpg 965×489 pixels”…
“DB FX 1.jpg 855×616 pixels”…
“DB FX 2.jpg 1,292×1,705 pixels”…

Berger: Why I am shorting the Nasdaq 100


 The last time September Retail Sales growth was this weak was 2009, limping aimlessly out of the ‘Great Recession’. With a mere 0.9% year-over-year growth, Johnson-Redbook data seems to confirm what Reuters reports is looming – the weakest U.S. holiday sales season for retailers since the recession. Consultancy firm AlixPartners expects sales to grow 2.8-3.4% during the November-December shopping period compared with 4.4% in 2014, based on analyzing consumer spending trends so far this year, noting (myth-busting for permabulls) dollars saved at the pump are being directed to personal savings or on non-retail activities.
Full Story Here:…


 With the effects of the financial crisis still lingering, 30 million Americans in the last 12 months tapped retirement savings to pay for an unexpected expense, new research shows. This undercuts financial security and underscores the need for every household to maintain an emergency fund .
Full Story Here:…

Corbyn: Tory austerity failed approach


UK Labour Party leader has slammed the Tory government’s austerity policy, calling it “the failed approach of the past.”
Jeremy Corbyn made the comments at a Labour Party conference on Tuesday.
During his first conference speech as the leader of the Labour Party, Corbyn said he would not stop being an “activist”.
He also reiterated that he would not impose “leadership lines” on his party.
Corbyn also said he was “unapologetic about reforming our economy to challenge inequality and protect workers better.”
Labour Party leader also said people should not have to accept what was given to them by global corporations, and there should be no limit on what they could achieve.
“We are a rich country. These things are not necessary or inevitable. They can and must be changed,” he reiterated.
“How dare these people talk about security for families and people in Britain? There’s no security for the 2.8 million households in Britain forced into problem debt by stagnating wages and the Tory record of the longest fall in living standards since records began,” he was quoted as saying by the British media.
Read more

6000 California Employees To Lose Their Jobs In Haggen Shutdown

(Thomas Dishaw) The grocery industry keeps taking hits. First A&P cuts 5,000 jobs, now Haggen a west coast operator pulls out of California leaving 6,000 workers high and dry after a botched Albertsons deal.  According to reports the small grocer (Haggen) was tricked it into buying hundreds of stores with false promises and then sabotaged its entry into new markets by unfair practices. Sounds like Haggen got tricked into buying 146 under performing Safeway and Albertson stores, which eventually forced them into bankruptcy. Now that’s a way to shut down your competition.

From NBC San Diego: Six thousand Haggen employees across California are poised to lose their jobs when store locations shutter, a union spokeswoman said Monday.
The United Food and Commercial Workers International (UFCW) issued a statement related to the grocery store chain’s announcement about closing 100 stores and departing from California.
It was the latest in bad news for Haggen, which filed for Chapter 11 bankruptcy protection earlier this month.
Union officials said employees were experiencing “untold frustration” with the bankruptcy process and officials are challenging Haggen’s decision to close the stores.
“In fact, there is no evidence that Haggen has conducted a real and organized sales process or taken good-faith steps to pursue buyers to operate these stores,” the union statement read.
Union officials said, however, they are pleased Haggen employees could potentially be hired back by Albertsons under a decision by the Federal Trade Commission.

BRICS foreign ministers call for unblocking IMF reform — Russian Foreign Ministry

The ministers see the reform as a measure to improve the system of global economic development in line with the interests and requirements of the developing countries
© Natalya Garnelis/TASS
MOSCOW, September 30. /TASS/. The foreign ministers of the BRICS group member-countries have called for unblocking the reform of the International Monetary Fund for the purpose of speeding up global economic development. Their meeting took place on the sidelines of the ongoing UN General Assembly session in New York.

"The ministers discussed the current condition of the global economy and finance," the Russian Foreign Ministry said. "They recognized the considerable contribution of the BRICS countries to the global economy and voiced the full certainty their economic cooperation has good prospects. They also underscored the importance of resolute and effective actions for the purpose of speeding up global growth."
The BRICS countries "reaffirmed the need for unblocking the reform of the IMF as a measure to reform the system of global economic development in line with the interests and requirements of the developing countries," the statement runs.
"The foreign ministers underlined the importance of tighter economic, financial and trading cooperation, in particular, through policy coordination and timely implementation of the BRICS economic partnership strategy and full format operation of the newly-established Development Bank and the African regional centre.

From 10 TRILLION To 19 TRILLION — President Obama has overseen the LARGEST increase in the National Debt in our nation’s history

US Debt Clock :: National Debt of United States
US national debt is so bad now that the U.S. Treasury has simply stopped reporting it…
“Officially,” the U.S. national debt has frozen in time, though “unofficially” it continues to grow at a frenetic pace.
What’s going on? Did the federal government suddenly become fiscally responsible and we are no longer accumulating country-destroying debt?
If you believe the U.S. Department of the Treasury, yes. As reported recently by CNS News, the national debt froze for more than 21 days.
Oh, wait. Look at the official figure being reported: $18,112,975,000,000. That just happens to be the official debt limit set by Congress. Indeed, $18,112,975,000,000 is about $25 million below the current legal debt limit of $18,113,000,080,959.35.

Hiding the true damage by making up numbers as they go

In a March 13 letter to House Speaker John Boehner, R-Ohio, Treasury Secretary Jack Lew explained that he was planning to declare a “debt issuance suspension period.” That was required, he explained, because in 2014 Congress passed legislation that “suspended” the debt limit until March 15, but reinstated it again on that date at whatever level the debt had reached at that time.
“As you know, in February 2014, Congress passed the Temporary Debt Limit Extension Act, suspending the statutory debt limit through March 15, 2015,” Lew said in his letter. “Beginning on Monday, March 16, the outstanding debt of the United States will be at the statutory limit. In anticipation of reaching that date, Treasury has suspended until further notice the issue of State and Local Government Series securities, which count against the debt limit.”
What are State and Local Government Series securities? According to the Congressional Research Service they are “customized securities available for state and local governments to hold proceeds of bond sales.” They are further considered to be part of the federal government debt held by the public.
“Because Congress has not yet acted to raise the debt limit,” Lew continued in his letter, “the Treasury Department will have to employ further extraordinary measures to continue to finance the government on a temporary basis. Therefore, beginning on March 16, I plan to declare a ‘debt issuance suspension period’ with respect to investment of the Civil Service Retirement and Disability Fund and also suspend the daily reinvestment of Treasury securities held by the Government Securities Investment Fund and the Federal Employees’ Retirement System Thrift Savings Plan.”
Some of these same actions have been taken before, during earlier periods when the debt seemed to freeze in time.

By This Measure, the U.S. has the 2nd Highest National Debt


In absolute terms, the United States is the most indebted country in the world, accounting for 29% of the world’s $60 trillion of sovereign debt.
However, this is not really a fair comparison in some ways because it does not account for the relative wealth of the country in contrast to poorer economies. That’s why it is standard practice to measure sovereign debt in a ratio comparing it directly to the economic productivity, measured by gross domestic product (GDP).
Using this ratio in comparison with other OECD countries, the United States is a modest 7th place (out of 34) in the rankings in terms of its debt load. However, as Jeffrey Dorfman writes in Forbes, comparing debt and GDP has some considerable problems.
Courtesy of: Visual Capitalist

Evernote Announces Layoffs, Closes 3 Global Offices

(Thomas Dishaw) Evernote may soon be deleted from the app world as the company continues to layoff their ever shrinking staff.  A note from CEO Chris O’Neill explained that the subscription based service grew almost 40% over last year but still needed to cut 47 employees and close 3 global offices…Sounds kind of fishy to me.  Here is what the CEO had to say in a blog post:

I joined Evernote as CEO two months ago because I saw the rare opportunity to help transform a product I rely on into a world class business. Since starting, I’ve gotten to know the amazing people here and have met many of our loyal users. This team has achieved three incredible feats: they’ve created one of the most important productivity tools in history, established one of the strongest personal success brands, and built a real revenue-driven business. My goal is to dramatically increase the impact of this solid foundation.
Evernote’s strength is in its core: notes, sync, and search. That’s where we’re going to focus. Achieving that focus means making some difficult decisions. Today we let go of 47 people from the Evernote team and announced the closure of three of our global offices. We are grateful for the immense contributions of each and every affected person.
I believe that a smaller, more focused team today will set us up for growth and expansion tomorrow. Here are two things that you can expect from us over the next several months: we will launch major foundational product improvements around the core features that you care about most, and we will pull back on initiatives that fail to support our mission.
The health of our business is just as important as the quality of our product. Here our fundamentals are stronger than they’ve ever been. There are millions of people with premium accounts and more than 20,000 companies working more productively with Evernote Business. Our paid subscription growth is very strong and almost entirely organic; the number of new paid subscribers is 40% higher than this time last year. Making these tough changes from a position of strength puts us on a path to long-term success.
This is an important moment in the life of our company. I want to thank all the Evernoters, past and present, for creating a product that is such a positive force in the lives of individuals and teams around the world. This company and this product are truly special, and I intend to keep it that way. I look forward to sharing more specific details with you in the months ahead. In the meantime, please send your thoughts to me directly at
– Chris

This Chart PROVES Stock Market Hasn’t Risen Since QE3!