The Country Is Over … The Economy Is Dying

The Country Is Over (Monty Pelerin’s World, April 5, 2013):

Data are hard to deal with when your vision is on the wrong side of it. Those wanting to claim there is a recovery underway are having just this problem. These people either have no understanding of economics or they believe falsely that they can inflate “animal spirits” with their hyped reports and that will initiate a recovery.

There will not be an economic recovery given the economic policies of this country. A recovery is not unlikely, I would argue it is closer to impossible if not impossible. The reasons for this position are not complicated. In short, the nation has become an out-of-control welfare state that is rapidly destroying the incentives to work or create jobs. Government policies appear designed toward this end. One doesn’t need a high IQ or  an advanced degree in economics to understand the problems.

There are innumerable factors responsible for the decline of the US. Only three important ones will convey why the economy is dying:

Read moreThe Country Is Over … The Economy Is Dying

The Knockout Blow The People Won’t See Coming

The knockout blow people won’t see coming (Sovereign Man, April 5, 2013):

Have you ever done something really stupid, just because you were in love? Something you look back on and cringe, thinking “why on earth did I do that?”

Of course. Who hasn’t?

Read moreThe Knockout Blow The People Won’t See Coming

Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash! (And This Is NOT From ‘The Onion’, But From The Wall Street Journal)

Portugal Considers Paying Public Workers In Treasury Bills Instead Of Cash (ZeroHedge, April 7, 2013):

As reported late on Friday, just as the market closed, the Portuguese constitutional court decided that several provisions of the country’s 2013 budget were not constitutional. According to the high court, cuts in wages and pensions of public employees were unfair (there’s that word again) because they targeted only the public sector. The court rejected plans to cut one of the 14 paychecks that public workers usually get each year and to slash 6.4% from pensions for retirees.  This coincided with the government warning that the court’s decision would put into question the country’s ability to fulfill its €78 billion international bailout program, which in turn would send bondholders of Portuguese sovereign debt scrambling for the exits as suddenly the country may find itself in the ECB’s “dunce” corner, with Draghi preparing to pull a “Berlusconi” on a government which can’t even whip its judicial branch in line. However, of more immediate concern is how will the government now plug a hole of up to €1.3 billion in its €5.3 billion 2013 budget. A solution has, luckily, presented itself: bypass the unconstitutional provisions by paying government workers not in cash, but in government bills! From the WSJ:

The Portuguese government is considering a plan to pay public workers and pensioners one month of their salary in treasury bills rather than cash after a high court ruled out wage cuts, a person familiar with the situation said Sunday.

Read morePortugal Considers Paying Public Workers In Treasury Bills Instead Of Cash! (And This Is NOT From ‘The Onion’, But From The Wall Street Journal)

These Charts Better Not Reflect The True State Of The US Economy

These Charts Better Not Reflect The True State Of The US Economy (ZeroHedge, April 6, 2013):

Lately, when it comes to obtaining an accurate sense of the true state of the US economy, it is as difficult if not more than analyzing the openly-manipulated Chinese data. On one hand, the Fed-juiced market, which has lost its discounting powers, no longer reflects the current or future economic (or corporate) fundamentals, on the other, massive seasonal aberrations, whether purposeful or accidental, have made a mockery of any data series, be it jobs, manufacturing, retail sales, or housing. On the other, the administration – still stuck in the worst economic “recovery” since the Great Depression – is desperate to telegraph an improving economy, most evident in the months leading up to the presidential election, which makes taking any data at face value problematic and naive at best. Yet even the openly-contradicting Chinese data manipulation has its Achilles heel in the form of monthly electricity consumption (and to a lesser extent, production) updates.

So what is the US equivalent of Chinese electricity consumption data? We believe it may be the little-tracked, and thus not nearly as “adjusted” weekly updates from the Energy Information Administration, whose data on barrels of US product supplied of both total petroleum products and just gasoline are as indicative of the true state of the energy-hungry beating heart of the US economy as any other data set, and is likely a far more accurate representation of what is really going on between the lines.

Read moreThese Charts Better Not Reflect The True State Of The US Economy

No Country For Rich, Fat Men

No Country For Rich, Fat Men (ZeroHedge, April 6, 2013):

Given the increasing weight of taxatio n on the middle- and upper-incomes in this country and the first step towards savings ‘wealth’ taxation, it is perhaps no surprise that the nation’s employers have decided enough is enough with another implicit tax – healthcare. As the WSJ reports, cost-conscious companies (such as spare tire manufacturer Michelin North America) are passing on the additional costs of healthcare to their obese workers. Are you a man with a waist measuring 40 inches or more? Have high blood pressure? Starting next year, your unhealthiness will cost you.

Employees who hit baseline requirements in three or more categories (blood pressure, glucose, cholesterol, triglycerides, and waist size) will receive up to $1,000 to reduce their annual deductibles. Those who don’t qualify must sign up for a health-coaching program in order to earn a smaller credit.

But, six in 10 employers say they plan to impose penalties in the next few years on employees who don’t take action to improve their health, according to a recent study, and current law permits companies to use health-related rewards or penalties as long as the amount doesn’t exceed 20% of the cost of the employee’s health coverage. Increasingly companies have flipped from the incentive scheme (to be healthy) to a penalty or ‘fat tax’.

Typically 20% of a company’s workforce drives 80% of health-care costs, and with companies unable to grow top-lines, the search for ever more cost-cutting means the balance of carrot and stick seems to be tilting increasingly to the stick.

So the people got their pro-equality Obamacare but if you are an 80/20 risk factor – you will be less equal than others.

Via WSJ,

Are you a man with a waist measuring 40 inches or more? If you want to work at Michelin North America Inc., that spare tire could cost you.

Read moreNo Country For Rich, Fat Men

Unemployment Rate Falls For All The Wrong Reasons (CNNMoney)

Don’t miss:

US: People Not In Labor Force Soar By 663,000 To 90 MILLION, Labor Force Participation Rate At 1979 Levels


Unemployment rate falls for all the wrong reasons (CNNMoney, April 5, 2013):

NEW YORK (CNNMoney) -What seemed like good news in Friday’s jobs report was a little less than that — the unemployment rate fell, but not because more people found work.

Instead, the rate was lower because the Labor Department estimated that there are nearly half a million fewer people in the labor force — the group that includes people with a job or looking for one.

Read moreUnemployment Rate Falls For All The Wrong Reasons (CNNMoney)

Bank Of England Admits ‘Stocks Don’t Reflect Economic Reality’

Bank Of England Admits “Stocks Don’t Reflect Economic Reality” (ZeroHedge, April 5, 2013):

The Bank of England’s Financial Policy Committee (BoEFPC) warns there is “evidence of the re-emergence of… behavior in financial markets not seen since before the financial crisis,” citing the increased issuance of synthetic products and added that banks have “little margin for error against a backdrop of low growth in the advanced economies,” despite what we are told about their ‘fortress balance sheets. Bloomberg Businessweek adds that the BoE were careful not to scare the public, they add, events currently “did not appear indicative of widespread exuberance in markets. But developments would need to be monitored closely.” This following the Fed’s warnings of ‘froth’ in the credit markets suggests central bans are considerably more concerned at blowing bubbles than they want to admit in public. ECB’s Weber recently commented that he feared, “the recent rally in financial markets could be a misleading signal,” which appears confirmed by the BoEFPC noting that equity performance since mid-2012, “in part reflected exceptionally accommodative monetary policies by many central banks… But market sentiment may be taking too rosy a view of the underlying stresses.”

Via Bloomberg BusinessWeek,

The Bank of England said rising equity markets don’t reflect the underlying economic situation and warned that investors may be underestimating risks in the financial system.

Gains by equities since mid-2012 “in part reflected exceptionally accommodative monetary policies by many central banks,” the BOE’s Financial Policy Committee said today in London in the minutes of its March 19 meeting. “It was also consistent with a perception among some contacts that the most significant downside risks had attenuated. But market sentiment may be taking too rosy a view of the underlying stresses.”

Read moreBank Of England Admits ‘Stocks Don’t Reflect Economic Reality’

Why Societe Generale Is Wrong About Gold’s Imminent ‘Demise’

Sprott: Why SocGen Is Wrong About Gold’s Imminent ‘Demise’ (ZeroHedge, April 5, 2013):

A Retort to SocGen’s Latest Gold Report

Société Générale (“SocGen”) recently published a special report entitled “The end of the gold era” that garnered far more attention than we think it deserved.  The majority of the report focused on SocGen’s “crash scenario” for gold wherein they suggest that gold could fall well below their 2013 target of US$1,375/oz. It also included a classic criticism that we’ve heard so many times before: that the gold price is in “bubble territory”. We have problems with both suggestions.

To begin, the report’s authors appear to view gold as a commodity, rather than as a currency. This is a common misconception that continues to plague most gold market analysis. Gold doesn’t really work as a commodity because it doesn’t get consumed like one. The vast majority of gold mined throughout history remains in existence today, and the total global gold stockpile grows in small increments every year through additional mine supply. This is also precisely why gold works so well as a currency. Total gold supply can only grow marginally, while fiat money supply can grow exponentially through printing programs. This is why gold’s monetary value is so important – it’s the only “currency” in play that is immune to government devaluation.

Chart A illustrates the relationship between the growth of central bank balance sheets in the US, EU, UK and Japan and the price of gold. This relationship has an extremely high correlation with an R2 of about 95%. As central banks increase the size of their balance sheets through ‘open market operations’ to buy bonds, mortgage-backed securities (“MBS”) and the like, they inject more fiat dollars into their respective banking systems. As gold has a relatively stable supply, if there are more dollars available, the price of gold should rise in dollar terms. It’s really a very simple and intuitive relationship – as it should be.


Source: Bloomberg and Sprott Asset Management LP

This relationship between central bank printing and gold has existed since the beginning of the gold bull market in 2000. In fact, this relationship shows that for every US$1 trillion increase in the collective central banks’ balance sheets, the price of gold has generally appreciated by an average of US$210/oz.

Read moreWhy Societe Generale Is Wrong About Gold’s Imminent ‘Demise’

Cyprus: Laiki Bank Staff Hit Worst Of All

Realted info

Cyprus: Why Big Depositors Are Facing A Complete Wipe Out

Another Non-Russian, Non-Oligarch, Non-Billionaire, Non-Tax Evader Speaks Up: ‘I Went To Sleep Friday A Rich Man, I Woke Up Poor’

TOTAL ECONOMIC COLLAPSE AWAITS CYPRUS – Caught In The Cyprus Crossfire: Small Businesses Suddenly With Zero Cash:

Because if the locals thought the deposit haircut is the worst of it, just wait until the full brunt of what a -20% depressionary collapse in the economy hits them head on.


Laiki Bank: The Cyprus bank staff hit worst of all (BBC News, April 5, 2013):

Cypriot savers are furious with their banks, but staff at the now-defunct Laiki Bank have been affected worse than most. Many borrowed money to buy shares in the bank – now worthless – and fear losing both their jobs and their pensions.

“You wouldn’t wish this to happen to your worst enemy,” says Andreas Chrysafis. “All this anxiety, seeing your staff desperate, your kids not understanding what is happening.”

Read moreCyprus: Laiki Bank Staff Hit Worst Of All

$529 Million In Federal Funding And All Jobs Destroyed Or Lost

Flashback:

Total Karma Recall: Fisker (Received $529 Million In Federal Subsidies) Pulls All Cars Due To Fire Risk

Taxpayers Lose Another $118.5 Million As Next Obama Stimulus Pet Project Files For Bankruptcy (Video)


$529 Million In Federal Funding And All Jobs Destroyed Or Lost (ZeroHedge, April 5, 2013):

Pop quiz:Q. What is the fiscal multiplier on $529 in government stimulus?

A. If you are Fisker Automotive, zero.

While the terminal fate of the federally-subdizied car company was no secret to anyone, there were some questions when this latest example of idiotic government “capital allocation” would get Solyndraed. The answer is now.

GigaOm reports:

According to several sources, electric car maker Fisker Automotive is planning to lay off many of its employees today. Sources tell me that there is a company meeting at 8AM today where the company will announce this to the employees.

I’ve also heard that law firm Outten & Golden has been looking into initiating a class action law suit to represent Fisker’s employees should Fisker fall into bankruptcy. The firm is looking into whether Fisker (like Solyndra) will or already has violated the WARN act.

Read more$529 Million In Federal Funding And All Jobs Destroyed Or Lost

Investigators Hit Brick Wall: Bank Of Cyprus CEO Hard Drives Wiped

Investigators Hit Brick Wall; Bank Of Cyprus CEO Hard Drives Wiped (ZeroHedge, April 5, 2013):

As the investigation into unusual loan write-downs and the ‘premature’ movement of capital away from Cyprus by the elites of that nation progresses, Cyprus Mail reports that the investigators – Alvarez and Marsal (A&M) – have found that the information provided by Bank of Cyprus (BoC) was incomplete and data deleting software were found on the computers of two senior executives. “Our computer forensic technologists have found that the computers of two employees, (former CEO) Mr. (Andreas) Eliades and (senior manager group treasury and private banking) Christakis Patsalides, have had wiping software loaded, which is not part of the standard software installations at the BoC.” Investigators found no e-mail files, mailboxes or user documents on Eliades’ desktop computer – “we had significant gaps in the e-mail data received from BoC for the period 2007 to 2010, a key period for our scope of investigation,” and no email backups were performed. A&M is looking into how BoC accumulated €2.4bn worth of Greek government bonds (GGBs), later suffering huge losses because of that, and into BoC’s expansion to Romania and Russia. We are sure this is all above board and normal IT protocol for the bank… or not.Via Cyprus Mail,

Deletion of data allegedly took place on computers belonging to senior Bank of Cyprus (BoC) executives, according to the leaked findings of a probe into the circumstances that forced the island’s biggest lenders to seek state assistance.

Alvarez and Marsal, the firm tasked with investigating why Bank of Cyprus and Laiki sought state assistance, said the information provided by BoC was incomplete and data deleting software were found on the computers of two senior executives.

“Our computer forensic technologists have found that the computers of two employees, (former CEO) Mr. (Andreas) Eliades and (senior manager group treasury and private banking) Christakis Patsalides, have had wiping software loaded, which is not part of the standard software installations at the BoC,” A&M said. “Mass deletion of data appears to have been undertaken on the Patsalides computer on October 18, 2012.”

A&M’s findings were handed over to parliament on Wednesday.

Investigators found no e-mail files, mailboxes or user documents on Eliades’ desktop computer.

Read moreInvestigators Hit Brick Wall: Bank Of Cyprus CEO Hard Drives Wiped

The Explosive Growth Of Poverty In America: 21 Statistics

21 Statistics About The Explosive Growth Of Poverty In America That Everyone Should Know (Economic Collapse, April 4, 2013):

If the economy is getting better, then why does poverty in America continue to grow so rapidly?  Yes, the stock market has been hitting all-time highs recently, but also the number of Americans living in poverty has now reached a level not seen since the 1960s.  Yes, corporate profits are at levels never seen before, but so is the number of Americans on food stamps.  Yes, housing prices have started to rebound a little bit (especially in wealthy areas), but there are also more than a million public school students in America that are homeless.  That is the first time that has ever happened in U.S. history.  So should we measure our economic progress by the false stock market bubble that has been inflated by Ben Bernanke’s reckless money printing, or should we measure our economic progress by how the poor and the middle class are doing?  Because if we look at how average Americans are doing these days, then there is not much to be excited about.  In fact, poverty continues to experience explosive growth in the United States and the middle class continues to shrink.  Sadly, the truth is that things are not getting better for most Americans.  With each passing year the level of economic suffering in this country continues to go up, and we haven’t even reached the next major wave of the economic collapse yet.  When that strikes, the level of economic pain in this nation is going to be off the charts.

The following are 21 statistics about the explosive growth of poverty in America that everyone should know…

Read moreThe Explosive Growth Of Poverty In America: 21 Statistics

US: People Not In Labor Force Soar By 663,000 To 90 MILLION, Labor Force Participation Rate At 1979 Levels

People Not In Labor Force Soar By 663,000 To 90 Million, Labor Force Participation Rate At 1979 Levels (ZeroHedge, April 5, 2013):

Things just keep getting worse for the American worker, and by implication US economy, where as we have shown many times before, it pays just as well to sit back and collect disability and various welfare and entitlement checks, than to work .The best manifestation of this: the number of people not in the labor force which in March soared by a massive 663,000 to a record 90 million Americans who are no longer even looking for work. This was the biggest monthly increase in people dropping out of the labor force since January 2012, when the BLS did its census recast of the labor numbers. And even worse, the labor force participation rate plunged from an already abysmal 63.5% to 63.3% – the lowest since 1979! But at least it helped with the now painfully grotesque propaganda that the US unemployment rate is “improving.”

People not in labor force:

Labor participation rate:

Read moreUS: People Not In Labor Force Soar By 663,000 To 90 MILLION, Labor Force Participation Rate At 1979 Levels

Japan’s Debt Crisis Visualized (Video)

Japan’s Debt Crisis Visualized (ZeroHedge, April 4, 2013):

In just a few short minutes, inspired by Kyle Bass, Addogram presents a short visual explanation of Japan’s debt problem. In the time it takes Ben Bernanke to print $13.7 million you’ll have a deep understanding of Aso, Abe, and Kuroda’s impending debt crisis.


YouTube

Hedge Fund Manager Kyle Bass: ‘Japan Will Implode Under Weight Of Their Debt’ (Video)

Kyle Bass: “Japan Will Implode Under Weight Of Their Debt” (ZeroHedge, April 4, 2013):

As the fast-money flabber-mouths stare admiringly at the rise in nominal prices of Japanese (and the rest of the world ex-China) stock prices amid soaring sales of wheelbarrows following Kuroda’s ‘shock-and-awe’ last night, it is Kyle Bass who brings these surrealists back to earth with some cold-hard-facting. Out of the gate Bass explains the massive significance of what the Japanese are embarking on, “they are essentially doubling the monetary base by the end of 2104.”

It is a “Giant Experiment,” he warns, but when you are backed into a corner and your debts are north of 20 times your government tax revenue, “you’re already insolvent.” Simply put, Bass says they have to do something and they have to something big because they are “about to implode under the weight of their debt.” For a sense of the scale of the BoJ’s ‘experimentation’, Bass sums it up perfectly (and concerningly), “the BoJ is monetizing at a rate around 75% of the Fed on an economy that is one-third the size of the US!”

What they are trying to do is devalue the currency to attempt to become more competitive while holding their rates market flat – the economic zealots running the world’s central banks believe they can live in that Nirvana – and Bass believes that is not the case, as they will lose control of rates, since leaving the zone of insolvency is impossible now. His advice, “if you’re Japanese, spend! or take it out of your country. If you’re not, borrow in JPY and invest in productive assets.” Do not be long JPY or Japanese assets as he concludes with the reality of Japan’s “hollowed out” manufacturing industry and why USDJPY is less important that KRWJPY.

A Ton Of Gold Bricks: What Capital Flight Looks Like In Italy (Video)

Hmmh.

A ton of gold is worth much more than just $6 million.

I guess we are talking about 100 kg of gold bars.


A Ton Of Gold Bricks: What Capital Flight Looks Like In Italy (ZeroHedge, April 4, 2013):

Curious why so little has been said about cash flowing out of Italy’s banks, especially when even UniCredit’s CEO today proudly warned everyone he is all for confiscating uninsured deposits as long as “everyone else is doing it” – and no, he is not kidding, so when it does happen, nobody will be able to say they weren’t warned. Maybe it is because Italian cash is actually not leaving the country at all. Instead, real “wealth” is departing the boot-shaped nation, quietly and under the radar, as fast as it can in another form: gold. As the clip below from Bloomberg shows, a car was intercepted at the Italy-Switzerland border, with a very special cargo: numerous bars of gold weighing a whopping one ton, worth $6 million. Furthermore, one can be absolutely certain that for every car that is caught at the border with a ton of “golden” cargo, there are 99 that pass through undisturbed and undetected. Which makes perfect sense: what better way to circumvent shadow capital controls such as those virtually everywhere in Europe, than to convert one’s paper money within country A so it stays in country A, into a far more valuable, anonymous and transportable store of wealth, such as gold, and quietly move it to country B, the one where the risk of deposit confiscation is (for now at least) far less?

Oh, did we mention the confiscated product was gold: not euros, not Cypriot euros, not dollars, not palladium, not bitcoin… gold?


YouTube April 4, 2013 (Bloomberg)

CEO Of Italy’s Largest Bank: Haircuts Of Uninsured Depositors ‘Acceptable’, Should Become A Template

CEO Of Italy’s Largest Bank Says Haircuts Of Uninsured Depositors “Acceptable”, Should Become A Template (ZeroHedge, April 4, 2013):

While the head of the ECB and his assorted kitchen sinks scramble to explain how Diesel-BOOM was horribly misunderstood when saying that depositor impairment may and will be the template for future European bank “resolution” (as should have been the case from Day 1), the CEO of Italy’s largest bank appears to have missed the memo. As Bloomberg reports, according to the chief executive Federico Ghizzoni, “uninsured deposits could be used in future bank failures provided global rulemakers agree on a common approach.” Or failing that, because if Cyprus taught us anything is that Europe will never have a common approach on anything, just use deposits as impairable liabilities, period, once the day of reckoning for Non-Performing Loans comes and these are forced to be remarked to reality, just as happened in Cyprus. One can only hope that uninsured deposits do not represent a substantial portion of the bank’s balance sheet because the CEO basically just told them they are next if when risk comes back to the Eurozone with a vengeance. Especially since as Mario Draghi was so helpful in pointing out, “there is no Plan B.

To wit:

Cutting large deposits in failing banks, along with other liabilities such as bonds, to offset losses is acceptable as long as small savers’ funds remain protected, Ghizzoni told reporters in Vienna late yesterday. The European Union has to introduce identical rules in all of its member states and ideally those rules would be coordinated globally, he said.

In fact, to the Italian, deposit impairment is perfectly ok as long as “everyone does it” – in other words, if it does become the template the Dutch finance minister already said it is, then all is well.

Including deposits “is acceptable if it becomes a European solution,” said Ghizzoni, 57. “What we cannot accept is differentiation country by country inside the same area. I would strongly suggest to make this decision not only within Europe but within the Basel Committee, where all countries are represented. Otherwise we would open the market for arbitrage.”

Read moreCEO Of Italy’s Largest Bank: Haircuts Of Uninsured Depositors ‘Acceptable’, Should Become A Template

Hedge Fund Manager Kyle Bass: Senior Obama Administration Official Said: ‘We’re Just Going To Kill The Dollar’ (Video)


YouTube

Description:

In this interview with investor Kyle Bass from Day 1 at AmeriCatalyst 6th of November 2011, in Austin, Texas, Bass discloses his discussion about the economic crisis with a senior from the Obama Administration. According to Kyle Bass the basic solution coming from this senior was: “We’re Just Going to Kill the Dollar”.

Killing the US Dollar in this context means keep printing more US Dollars in order to weaken the dollar to make exports cheaper through inflation. Massive inflation might be the answer for the Obama Administration, but in the process your purchasing power will be destroyed. And because the US Dollar is the world’s reserve currency the eventual impact of inflation would have an impact that would reach far beyond those holding US Dollar assets.

Thousands of paper currencies has come and gone over the years and there is no question if the dollar, or the euro for that sake, will have its value go to zero; the question is when?

Bank Of Japan To Pump $1.4 TRILLION Into Economy In Unprecedented ‘Stimulus’

Commentary:

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
– Alan Greenspan

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
– John Maynard Keynes

Quantitative easing = printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = theft!

Where Humor & Reality Meet: Quantitative Easing Explained (Video):



Bank of Japan Governor Haruhiko Kuroda

BOJ to pump $1.4 trillion into economy in unprecedented stimulus (Reuters, April 4, 2013):

The Bank of Japan unleashed the world’s most intense burst of monetary stimulus on Thursday, promising to inject about $1.4 trillion into the economy in less than two years, a radical gamble that sent the yen reeling and bond yields to record lows.

New Governor Haruhiko Kuroda committed the BOJ to open-ended asset buying and said the monetary base would nearly double to 270 trillion yen ($2.9 trillion) by the end of 2014, a dose of shock therapy officials hope will end two decades of stagnation.

The policy was viewed as a radical gamble to boost growth and lift inflation expectations and is unmatched in scope even by the U.S. Federal Reserve’s own quantitative easing program.

The Fed may buy more debt, but since Japan’s economy is about one-third the size of the economy, Kuroda’s plan looks even bolder.

“This is an unprecedented degree of monetary easing,” a smiling Kuroda told a news conference after his first policy meeting at the helm of the central bank.

Read moreBank Of Japan To Pump $1.4 TRILLION Into Economy In Unprecedented ‘Stimulus’

Former Enron CEO Jeff Skilling May Be Released From Prison Over A Decade Early

Eric Holder Gets Busy: Enron’s Skilling May Be Released From Prison Over A Decade Early (ZeroHedge, April 4, 2013):

Former Enron CEO Jeff Skilling may be the latest beneficiary of the culture of pervasive permitted, even according to some – encouraged, crime. After being sentenced to prison for 24 years in the aftermath of Enron’s spectacular 2001 bankruptcy, the former CEO may be released after serving well less than half of his term. As a result his prison term, which scheduled to end in 2028, may be cut by more than half as a result of a new agreement with the Department of Justice. It appears that AG Eric Holder is so busy not prosecuting Wall Street for being Too Big To Prosecute, he has decided it is far wiser to spend his time productively by commuting the sentences of convicted financial felons, because apparently there is nothing more important to do.

Reuters reports: “Former Enron Chief Executive Jeffrey Skilling, who is serving a 24-year sentence over the company’s spectacular collapse, may get a chance to leave prison early. The U.S. Department of Justice posted a notice indicating that prosecutors are considering entering an agreement with Skilling that could result in his being resentenced. It is unclear how much Skilling’s term could be shortened under a resentencing agreement. Wednesday’s notice gives former Enron employees, stockholders and other victims of Skilling’s fraud that led to Enron’s 2001 bankruptcy a chance to object.”

From the DOJ filing:

Read moreFormer Enron CEO Jeff Skilling May Be Released From Prison Over A Decade Early

Eurozone Unemployment At Record 12 Percent

Related info:

COLLAPSE: Youth Unemployment: Greece 61.7% – Spain 55.6% – Eurozone Over 24%


Euro area unemployment at record 12 percent (AP. April 3, 2013):

LONDON (AP) — The eurozone economy has passed another bleak milestone.

Official figures Tuesday showed that unemployment across the 17 European Union countries that use the euro has struck 12 percent for the first time since the currency was launched in 1999.

Read moreEurozone Unemployment At Record 12 Percent

ECB’s Mario Draghi Responds To Zero Hedge: ‘THERE IS NO PLAN B’

Mario Draghi Responds To Zero Hedge: “There Is No Plan B” (ZeroHedge, April 4, 2013):

This happened earlier today, at the ECB press conference:Scott Solano, DPA: Mr Draghi, I’ve got a couple of question from the viewers at Zero Hedge, and one of them goes like this: say the situation in Greece or Spain deteriorates even further, and they want to or are forced to step out of the Eurozone, is there a plan in place so that the markets don’t basically collapse? Is there some kind of structural system, structural safety net, especially in the area of derivatives? And the second questions is: you spoke earlier about the Emergency Liquidity Assistance, and what would have happened to the ELA in Cyprus, the approximately €10 billion, if the country had decided to leave the Eurozone?

Mario Draghi, ECB: Well you really are asking questions that are so hypothetical that I don’t have an answer to them. Well, I may have a partial answer. These questions are formulated by people who vastly underestimate what the Euro means for the Europeans, for the Euro area. They vastly underestimate the amount of political capital that has been invested in the Euro. And so they keep on asking questions like: “If the Euro breaks down, and if a country leaves the Euro, it’s not like a sliding door. It’s a very important thing. It’s a project in the European Union. That’s why you have a very hard time asking people like me “what would happened if.” No Plan B.

Secondly, I think the ECB has shown its determination to fight any redenomination risk. And OMT with its precise rules and acting within its mandate, is there to this purpose. So that’s the answer to the first question.

The second question was about the ELA, but again it’s related to “if Cyprus leaves”  and again we don’t have that in mind, so…. No Plan B.

Informative. We do have three follow up questions:

Read moreECB’s Mario Draghi Responds To Zero Hedge: ‘THERE IS NO PLAN B’

Russia: Last Capitalist (Pig) Standing

Russia: Last Capitalist (Pig) Standing (Zero Hedge, April 1, 2013):

While most of the western developed economies become more and more centrally planned and creative destruction is avoided at all costs (for fear it will be the straw that breaks the fractionally-reserved, rehypothecated camel’s back of the financial system – and therefore sovereign financing); it appears ironic that Russia is playing capitalist hardball with the losers from the Cyprus ‘solution’. Russia’s First Deputy Prime Minister Igor Shuvalov, announced this weekend, that “if someone gets stuck and loses money in those two biggest banks, that’s really too bad, but the Russian government isn’t planning to do anything in this case.”

As Bloomberg reports, Shuvalov told reporters last month that Russia may ultimately benefit from Europe’s decision to target deposit holders. By setting that precedent, Europe has cast doubt on the reliability of its banks and makes Russia’s financial system look comparatively more attractive – but is “closely monitoring”  the situation around Russian Commercial Bank, a Cypriot unit of state-run lender VTB Group, adding that VTB’s exposure in Cyprus is “absolutely manageable.

So, in the new normal, the USA socializes losses but the ex-USSR sticks to its new capitalist roots?

Read moreRussia: Last Capitalist (Pig) Standing