Economy

Hundreds of Thousands Call on FCC to Halt ‘Disastrous Merger’

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stop-the-merger_Time-Warner-Cable_Comcast

– Hundreds of Thousands Call on FCC to Halt ‘Disastrous Merger’ (Common Dreams, Dec 23, 2014):

Free press advocates say Comcast and Time Warner merger is an ‘unacceptable prospect for Internet users, the economy and the future of communications in America.’

Critics of the proposed Comcast buyout of Time Warner Cable are flooding the Federal Communications Commissions, calling on the government office to shut down this “disastrous merger.”

In addition to the thousands of individuals who voiced their opposition to the $45 billion media mega-merger, over 600,000 comments were submitted by advocacy groups Common Cause and Consumers Union ahead of the public comment period deadline Tuesday.

Read moreHundreds of Thousands Call on FCC to Halt ‘Disastrous Merger’

The Destruction Of The Middle Class Is Nearing The Final Stages

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From the article:

“There are three lessons that many people will learn in the coming months. If you do not have it already you may not be able to get it. If you do not have it physically in your hands you do not own it. If you cannot protect it you will not have it for long.”

R.I.P.-Middle-Class

– The Destruction Of The Middle Class Is Nearing The Final Stages (Project Chesapeake, Dec 17, 2014):

The events of the past few months seem astounding when taken in all at once. The plan to destroy the U.S. dollar and the American middle class is moving at an ever increasing speed.

At the recent G20 meeting the nations agreed that bank deposits would no longer be considered money. These bank deposits become the property of the banking institution and as such can be used any way the bank wants. This means that any money you deposit in a bank now is no longer yours but makes you an investor in the bank and subject to lose that money if a banking crisis takes down the bank.

Read moreThe Destruction Of The Middle Class Is Nearing The Final Stages

Exposing The Deception: How The US Economy “””Grew””” By $140 Billion As Americans Became Poorer

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– Exposing The Deception: How The US Economy “Grew” By $140 Billion As Americans Became Poorer (ZeroHedge, Dec 23, 2014):

This is simply stunning.

Regular readers will recall that last month, at the same time as the US Bureau of Economic Analysis reported was a far better than expected 3.9% GDP (since revised to 5.0% on the back of the previously noted Obamacare spending surge), it also released its Personal Spending and Income numbers for the month of October, or rather revised numbers, because as we explained exactly one month ago “Americans Are Suddenly $80 Billion “Poorer“” thanks to (upward) revised spending data and (downward) revised income. What this meant a month ago is that as a result of a plunge in the imputed US savings rate, some $80 billion in personal savings was revised away from the average American household and right into the US economy.

After all, something had to grow the US GDP by a massive amount in order to give the Fed the green light it needs to hike rates eventually, just so it can then ease when the global dry powders from all the other central banks is used up.

And sure enough, this is how just one month ago, personal income was revised lower…

Disposable Persona Income old vs revised

… Even as personal spending was revised higher:

Read moreExposing The Deception: How The US Economy “””Grew””” By $140 Billion As Americans Became Poorer

Marc Faber: ‘The U.S. Government Is A Laughing Stock Of The World’ (Sprott Money News Video)

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I agree the with Marc Faber that the U.S. government will – again – try to take away the gold from the people, …

… which is one of the many reasons why I’ve told people to invest into silver, because I do not believe that they will try to take away your silver.

However, I do not agree with Marc Faber’s recommendation to store your gold in a vault in Singapore or Switzerland.

Related info:

– Secret Document: EU Plans To Forcibly Open All Safe Deposit Boxes

– The Importance Of Owning Your Own Bullion And Storing It Outside The Banking System

– States Seize Citizens’ Safe Deposit Boxes To Balance Their Budgets (ABC News Video)

– US DEPARTMENT OF HOMELAND SECURITY HAS TOLD BANKS – IN WRITING – IT MAY INSPECT SAFE DEPOSIT BOXES WITHOUT WARRANT AND SEIZE ANY GOLD, SILVER, GUNS OR OTHER VALUABLES IT FINDS INSIDE THOSE BOXES!

– James G. Rickards of Omnis Inc.: Get Your Gold Out Of The Banking System

– Roosevelt Gold Confiscation In 1933: ‘No American Could Visit A Safe Deposit Box For Some Time Without A Government Agent Accompanying Him’


Dec 22, 2014

Russian Energy Minister: No Gas For Ukraine If It Fails To Pay $1.65 Billion Debt In A Week

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Russia Energy Minister Alexander Novak
Russia’s Energy Minister Alexander Novak

– Russian warning: No gas for Ukraine if it fails to pay $1.65bn debt in a week (RT, Dec 23, 2014):

Energy Minister Aleksandr Novak has threatened Russia may turn off the taps if Kiev doesn’t repay the remaining $1.65 billion of its gas debt by the end of December.

The warning comes less than a month after Russia resumed supplying Ukraine with gas.

Kiev had to pay $378 million in advance for December deliveries.

The prepayment regime introduced for Ukraine was just one part of the so–called ‘winter plan’ between Russia and Ukraine. The other critical term is that Kiev needs to repay the remainder of its multibillion dollar gas debt by the year end.

Read moreRussian Energy Minister: No Gas For Ukraine If It Fails To Pay $1.65 Billion Debt In A Week

Here Is The Reason For The “””Surge””” In Q3 GDP

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From the article:

“In short, two-thirds of the “boost” to final Q3 personal consumption came from, drumroll, the same Obamacare which initially was supposed to boost Q1 GDP until the “polar vortex” crashed the number so badly, the BEA decided to pull it completely and leave this “growth dry powder” for another quarter. That quarter was Q3.”

– Here Is The Reason For The “Surge” In Q3 GDP (ZeroHedge, Dec 23, 2014):

Back in June, when we were looking at the final Q1 GDP print, we discovered something very surprising: after the BEA had first reported that absent for Obamacare, Q1 GDP would have been negative in its first Q1 GDP report, subsequent GDP prints imploded as a result of what is now believed to be the polar vortex. But the real surprise was that the Obamacare boost was, in the final print, revised massively lower to actually reduce GDP!

This is how the unprecedented trimming of Obamacare’s contribution to GDP looked like back then.

Healthcare Contribution

Read moreHere Is The Reason For The “””Surge””” In Q3 GDP

Grow Your Way Out of Debt? Don’t Make Us Laugh …

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The Legacy - Cartoon

– Grow Your Way Out of Debt? Don’t Make Us Laugh … (Acting Man, Dec 22, 2014):

Too Much Debt

But today, we continue with our look at the macro situation at the end of 2014… One way of measuring GDP is to add together consumption, investment, government spending and net exports.

The idea is to measure total spending. And in this way, also measure production. Most things produced are sold. Add up how much spending there is and you get an idea of how much production there’s been.

US GDP is reported to be $18 trillion a year – with $3.5 trillion coming from US federal government spending. Add state and local government spending, and the total rises to more than $6 trillion.

This means that the private sector – the part that pays the bills – is only $12 trillion. Total debt – government, corporate and personal – in the US is now $58 trillion (misreported yesterday as $59 trillion… but what’s a trillion dollars between friends?). That’s nearly five times the real economy that supports it.

And it helps explain why it is so hard to “grow your way out” of debt. Assuming an annual interest rate of 2%, even if you could contain debt increases to 3% of GDP a year, the productive part of the economy would have to grow at 5% just to stay even. No developed economy in the world is growing that fast.

At an interest rate of 3%, the annual interest on $58 trillion is $1.7 trillion. That’s slightly less than 10% of GDP. But it’s 14% – or one of every seven dollars – of the private sector economy.

Read moreGrow Your Way Out of Debt? Don’t Make Us Laugh …

Ukraine Central Bank Conned Into Swapping Its Gold For Lead Bricks

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gold ukraine

– Ukraine Central Bank Conned Into Swapping Its Gold For Lead Bricks (ZeroHedge, Dec 22, 2014):

Just when one thought the story of Ukraine and its (now non-existant) gold could not get any more surreal, it did.

As a reminder, it was about a month ago when we learned courtesy of an interview on Ukraine TV with the country’s central bank head Valeriya Gontareva, that Ukraine’s gold was virtually all gone, when she made the stunning admission that “in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it’s just 1% of reserves.”

That in itself would have been sufficient to explain why just a few short days later, the Netherlands shocked the world when it announced it had secretly repatriated 122 tonnes of gold from the NY Fed, and had the story of Ukraine’s missing gold ended there (or even with the criminal probe launched by Ukraine whether the central bank head had abused her power and misused her office when she “intentionally committed an extremely unfavorable transaction for the gold and forex reserves of Ukraine”), it still would have been one of the most bizarre, surreal stories of 2014.

Luckily, the story just got far better, and far, far more bizarre and surreal.

As Bloomberg reports, Ukraine opened a criminal probe after several gold bars at the central bank’s storage in the southern city of Odessa turned to be painted lead.

Read moreUkraine Central Bank Conned Into Swapping Its Gold For Lead Bricks

‘Isolated’? China Officially Offers Help To ‘Irreplaceable Strategic Partner’ Russia

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xi-jinping-vladimir-putin

– “Isolated”? China Officially Offers Help To “Irreplaceable Strategic Partner” Russia (ZeroHedge, Dec 22, 2014):

Just a week ago we detailed how China was preparing to bailout Russia’s liquidity crisis via the 150 billion yuan swap line the two nations agreed in October. Today, as Bloomberg reports, we got confirmation as two Chinese ministers offered support for Russia. China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying; and Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia. The Global Times (mouthpiece for the Comunist Party) wrote in an editorial this weekend, “Russia is an irreplaceable strategic partner on the international stage.” Isolated?

A week ago we noted the movements and tone from China suggested a ‘bailout’ was coming for Russia, and it appears the market is starting to realize that Russia is not so isolated…

20141222_RUB

It seems CNBC and the mainstream media are oddly quiet about the 31% surge in the value of the Ruble in the last 6 days…

Which is not entirely surprising as, for those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.

Read more‘Isolated’? China Officially Offers Help To ‘Irreplaceable Strategic Partner’ Russia

Don’t Tell Germany Draghi Is About To Monetize 90% Of Bund Issuance

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– Don’t Tell Germany Draghi Is About To Monetize 90% Of Bund Issuance (ZeroHedge, Dec 22, 2014):

The Bank of Japan’s expansion of record stimulus today may see it buy every new bond the government issues.

The BOJ said it plans to buy 8 trillion to 12 trillion yen ($108 billion) of Japanese government bonds per month under stepped-up stimulus it announced today. That gives Governor Haruhiko Kuroda leeway to soak up the 10 trillion yen in new bonds that the Ministry of Finance sells in the market each month.

Translated: the BOJ will monetize 100% of all Japanese debt issuance (source).

… And this:

in Q1, we expect the ECB to announce a EUR500bn sovereign QE program and buy EMU government bonds according to each EMU country’s ECB capital key contribution. This implies that the ECB would purchase EUR130bn of German bonds, i.e., 90% of the 2015 gross issuance of German Bunds.

Translated: the ECB will monetize 90% of all German debt issuance (source).

Or just show them this chart.

Read moreDon’t Tell Germany Draghi Is About To Monetize 90% Of Bund Issuance

Bloomberg’s Commodity Index Drops To Lowest Since 2009: What Does It Mean?

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Commodity Index Bloomberg

– Bloomberg’s Commodity Index Drops To Lowest Since 2009: What Does It Mean? (ZeroHedge, Dec 22, 2014):

Moments ago we learned that for all talk of a commodity “bottom”, the “energetic” dead cat has resumed its inverse bounce. To wit:

  • BLOOMBERG COMMODITY INDEX EXTENDS DROP TO LOWEST SINCE 2009

So what does that mean? The answer: it all depends on whose narrative one chooses to believe and/or which narrative the US Ministry of truth is promoting on any given day in order to boost confidence.

The main plotline now is simple: plunging commodity prices (just don’t call them deflation, “negative inflation” is much better) are a huge tax cut on the US consumer the pundits will have you know. And why not: so simple a Jonahtan Gruber could have come up with it.

The only problem is that you learn all this from the same pundits who told you just a few months ago, that soaring commodity prices are great for the economy, for jobs, and, drumroll, for the consumer.

Read moreBloomberg’s Commodity Index Drops To Lowest Since 2009: What Does It Mean?

How The CIA Launched The ‘Financial Pearl Harbor’ Attacks On Russia And Venezuela

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– How the CIA Launched the «Financial Pearl Harbor» Attacks on Russia and Venezuela (Strategic Culture Foundation, Dec 20, 2014):

Central Intelligence Agency director John Brennan’s long familiarity with Saudi Arabia, owing to the time he spent there as the CIA station chief in Riyadh in the 1990s and his knowledge of Saudi oil operations, has paid off. Petroleum industry insiders claim that Brennan’s agents inside Saudi Aramco convinced the firm’s management and the Saudi Oil Ministry to begin fracking operations in order to stimulate production in Saudi Arabia’s oldest oil fields. The Saudis, who are not known for their hands-on knowledge of their nation’s own oil industry, agreed to what became an oil pricing catastrophe which would not only affect Saudi Arabia but oil producing nations around the world from Russia and Venezuela to Nigeria and Indonesia.

By pumping high-pressure salt water into older wells, some at a depth of three to six thousand feet, an inordinate amount of pressure was built up. The CIA’s oil industry implants knew what would occur when the fracking operations began. Due to the dangerously high water pressure, the Saudis were forced continuously pump oil until the pressure became equalized. That process is continuing. If the Saudis ceased pumping oil, they would permanently lose the wells to salt water contamination. In the current “pump it or lose it” situation, the Saudis are forced to pump at a rate that may take up to five years before they can slow down production rates to pre-glut levels.

Read moreHow The CIA Launched The ‘Financial Pearl Harbor’ Attacks On Russia And Venezuela

Kazakhstan Prepares For $40 Oil, Gary Schilling Says “Oil Going To $20”

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Dont-worry-be-happy

– Kazakhstan Prepares For $40 Oil, Gary Schilling Says “Oil Going To $20” (ZeroHedge, Dec 22, 2014):

“People should not be worried,” explained Kazakhstan President Nursultan Nazarbayev in a TV address over the weekend, “we have a plan in place if oil prices are $40 per barrel.” Kazakhstan, the second largest ex-Soviet oil producer after Russia, explains “there are reserves which could support people, preventing living conditions from worsening.” However, if A. Gary Schilling’s reality check of $20 oil being possible comes to fruition, as he explains, what matters are marginal costs – the expense of retrieving oil once the holes have been drilled and pipelines laid. That number is more like $10 to $20 a barrel in the Persian Gulf… We wonder who has a plan for that?

The Kazakh President says “don’t worry”, as Reuters reports…

Read moreKazakhstan Prepares For $40 Oil, Gary Schilling Says “Oil Going To $20”

‘Houston, You Have A Problem’ – Texas Is Headed For A Recession Due To Oil Crash, JPM Warns

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oil jobs manhattan institute

– “Houston, You Have A Problem” – Texas Is Headed For A Recession Due To Oil Crash, JPM Warns (ZeroHedge, Dec 21, 2014):

It was back in August 2013, when there was nothing but clear skies ahead of the US shale industry that we asked “How Much Is Oil Supporting U.S. Employment Gains?” The answer we gave:

The American Petroleum Institute said last week the U.S. oil and natural gas sector was an engine driving job growth. Eight percent of the U.S. economy is supported by the energy sector, the industry’s lobbying group said, up from the 7.7 percent recorded the last time the API examined the issue. The employment assessment came as the Energy Department said oil and gas production continued to make gains across the board. With the right energy policies in place, API said the economy could grow even more. But with oil and gas production already at record levels, the narrative over the jobs prospects may be failing on its own accord…. The API’s report said each of the direct jobs in the oil and natural gas industry translated to 2.8 jobs in other sectors of the U.S. economy. That in turn translates to a total impact on U.S. gross domestic product of $1.2 trillion, the study found.

Two weeks ago we followed up with an article looking at “Jobs: Shale States vs Non-Shale States” in which we showed the following chart:

Read more‘Houston, You Have A Problem’ – Texas Is Headed For A Recession Due To Oil Crash, JPM Warns

2014 Year In Review (Part 2): Will 2015 Be The Year It All Comes Tumbling Down?

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2015

– 2014 Year In Review (Part 2): Will 2015 Be The Year It All Comes Tumbling Down? (ZeroHedge, Dec 21, 2014):

Despite the authorities’ best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: “Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out.”

“I’m tired of being outraged!”

…

150 Years Of Global Monetary Policy Summed Up In One Word (And 1 Chart)

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–  150 Years Of Global Monetary Policy Summed Up In One Word (And 1 Chart) (ZeroHedge, Dec 20, 2014):

“Zero…”

ZIRP

With all the “talk” of diverging paths of monetary policy… one could be forgiven, if glancing at the chart above, for thinking the inevitable endgame of Keynesianism is very much at hand as first The BoJ, then The Fed, then Europe all enter ZIRP… and now NIRP…

Source: Goldman Sachs

A Funny Thing Happened To Oil Prices When Nixon Killed The Gold Standard

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Israeli PM Golda Meir meets U.S. President Richard Nixon in Washington, March 1, 1973

– A Funny Thing Happened To Oil Prices When Nixon Killed The Gold Standard (ZeroHedge, Dec 20, 2014):

For the past 150 years, crude oil prices have varied between around $10 per barrel and around $120 per barrel. For many decades, oil prices were relatively “stable” but a funny thing happened in the early 70s and everything changed – whether coincidental or causative the linkages between the oil crisis and Nixon’s Gold-Standard-busting of Bretton Woods are clear in the chart below. Goldman expects continued high oil price volatility with risks skewed to the downside as the market searches for a new equilibrium… and a period of macroeconomic adjustment to structurally lower oil prices. Is oil adjusting to a new ‘gold-standard-esque’ normal?

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It Cost Ukraine’s Government $4 Billion To Get Re-Elected

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– It Cost Ukraine’s Government $4 Billion To Get Re-Elected (ZeroHedge, Dec 20, 2014):

As the world grows used to hearing of reserve depletion among less-developed nations defending their currencies from collapse, we thought the following chart might open a few eyes as to the real driver of attempting to create ‘stability’ by intervention. In the run-up to October’s parliamentary election in Ukraine, the Hryvnia became oddly stable – signaling to the world that the current government had everything under control and should be re-elected. Since the re-election, the Ukrainian currency has re-collapsed to record lows. How did the Ukrainian government ‘ensure’ re-election via ‘stability’? By blowing almost $4bn (a record 23% of reserves) in one month to maintain the currency’s level…

20141219_UAH

Money well spent we are sure…

Charts: Bloomberg

2014 Year In Review (Part 1): The Final Throes Of A Geopolitical Game Of Tetris

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2014

– 2014 Year In Review (Part 1): The Final Throes Of A Geopolitical Game Of Tetris (ZeroHedge, Dec 20, 2014):

Every year, David Collum writes a detailed “Year in Review” synopsis full of keen perspective and plenty of wit. This year’s is no exception. “I have not seen a year in which so many risks – some truly existential – piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows…”

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The Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving

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– The Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving (ZeroHedge, Dec 19, 2014):

We are sure it’s nothing – since stock markets in China and The US are soaring – but deep, deep down in the heart of the real economies, there is a problem. The Baltic Dry Index has fallen for 21 straight days, tumbling around 40% since Thanksgiving Day.  

Baltic-Dry-Index

This is the biggest collapse in the ‘trade’ indicator (which we should ignore unless it is rising) since records began 28 years ago…

Read moreThe Baltic Dry Index Has Never Crashed This Fast Post-Thanksgiving

China’s Stocks Worth 50% More Than Rest Of BRICS Combined

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– China’s Stocks Worth 50% More Than Rest Of BRICS Combined (ZeroHedge, Dec 19, 2014):

Thanks to the massive surge of speculative trading account openings, Chinese stocks are up 28% in the last month and a stunning 52% since China unleashed ‘QE-Lite’. This has sent the total market capitalization of China’s stocks soaring relative to the rest of the BRICS. In fact, Chinese stocks are now worth 55% more than Brazil, Russia, India, and South Africa combined… the most ever.

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Just What Is China Buying?

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– Just What Is China Buying? (ZeroHedge, Dec 19, 2014):

Something strange is going on in China. On one hand, as the chart below shows, China’s trade surplus is growing and growing, and just hit record highs. In other words, China is – on paper – receiving record amounts of foreign currencies in exchange for its (mostly) goods exports.

That much is clear in the Chinese (record) trade balance chart below:

China Trade Balance

Yet on the other hand, a chart from Deutsche Bank shows something very peculiar: even as China’s foreign reserves should be rising, they are not only dropping, but just suffered their biggest quarterly drop in the past decade!

Read moreJust What Is China Buying?