Posts Tagged ‘kleptocracy’

Friday Follies – Will Today be the 13th Day Below S&P 2,000?

SPY 5 MINUTE12 failures so far.

12 trading days since the S&P first hit 2,000 (Aug 25th) in which we have failed to hold 2,000 for a full day.  Not one and, unless the Futures pop 10 points before we open, not today either.  On 10 of those days, we've had a late-day run-up on low volume that popped us over 2,000 and on 7 of those days, 2,000 held at the close but EVERY SINGLE DAY – it also failed to hold.  

Let's not forget that, during this time, we've had TRILLIONS of Dollars of additional stimulus pledged by Carney, Draghi, Kuroda and other minor Central Banksters and Yellen has certainly been as doveish as she could by (while still tapering our existing Trillion Dollar stimulus).  This is how our market behaves WITH Trillions of Dollars of cash being pumped into the Global economy – I wonder what will happen when it stops?  

Of course, maybe it won't stop but, if it doesn't, this chart will look even uglier.  This is a chart of our projected net annual interest payments on our debt in 10 years.  That's $880 BILLION Dollars each year, just in interest payments, up $650Bn from the $233Bn we are spending now.  

That's WITHOUT additional stimulus so I guess we can go for a bit more and make it an even Trillion, right?  These are what we used to call CONSEQENCES – back when we used to care about such things.  The US is not the leader in debt issuance, not by a long shot.  Japan is 150% more in debt than we are and China has now doubled our debt to GDP ratio, after having been a creditor back in 2007 but now the undisputed king of stimulus spending.    

EWG WEEKLYEurope is also a mess.  As I said to our Members in an early-morning Alert:  Another thing the US Media is purposely ignoring is the 12.5% correction in Europe (example on Germany chart) since July that, so far, has bounced weakly (4-point drop on EWG has weak bounce at 28.8 and strong at 29.6) – failing exactly
continue reading


Tags: , , , , , , , , , ,




The Coming Collapse of the Real Estate Market

Here’s another great article on the frauds at the heart of the mortgage and banking sectors. – Ilene 

The Coming Collapse of the Real Estate Market 

foreclosure Courtesy of Charles Hugh Smith, Of Two Minds 

The system for financing mortgages and regulating that financing has failed, completely and utterly. The mortgage and real estate markets are now in collapse.

Yesterday I wrote about how positive feedback loops lead to collapse. Welcome to the U.S. housing and mortgage markets. As I have documented here numerous times, the entire U.S. mortgage market has already been socialized: 99% of all mortgages are backed by the three FFFs--Fannie, Freddie and FHA--and the Federal Reserve has purchased a staggering $1.2 trillion in mortgage-backed assets in the past year or so to maintain the illusion that there is a market for mortgage-backed securities.

There is, but only because the mortgages are backed by the Federal Government and propped up by the Federal Reserve.

The mortgage market is completely dependent on government guarantees and quasi-Government purchases of securitized mortgages. If the mortgage market were truly socialized, then the Central State would own the banks which originate, service and own the mortgages.

But then the private owners and managers of the "too big to fail" banks would not be reaping hundreds of billions in profits and bonuses. And since the banking industry has effectively captured the processes of governance (that is, Congress and the various regulatory agencies), then what we have is a system of private ownership of the revenue and profits generated by the mortgage industry and public absorption of the risks and losses.

Could anything be sweeter for the big banks? No.

The incestuous nature of the system is breathtaking. The Fed creates the credit which enables the mortgages, the Treasury guarantees the mortgages via Fannie, Freddie and FHA, the Fed buys the mortgages ($1.3 trillion in mortgages are on their balance sheet) and the private banks collect the fees and profits.

One of the core tenets of the Survival+ critique is the State/Financial Plutocracy partnership. There are many examples of this partnership (crony capitalism in which the State is the "enforcer" which collects the national income and distributes it to its private-sector cronies), but perhaps none so blatant and pure as the mortgage/banking sector.

But now the entire legal basis for that privatized-profits, socialized losses system has dissolved. The foreclosure scandal…
continue reading


Tags: , , , , , , , , , , , , , , , , , ,




Lair of the Pigmen: FHA to Extend Government Loan Subsidy Benefits to NYC Luxury Condo Market

Lair of the Pigmen: FHA to Extend Government Loan Subsidy Benefits to NYC Luxury Condo Market

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Weren’t FHA loans supposed to be a form a welfare for ‘poor people?’ Not since the Expanding America Home Ownership Act of 2007

And it appears this is one ‘reform’ that can’t be blamed on ‘the liberals’ and Obama. Crony Capitalism is not a political party, it’s a way of life in which power and greed are the measure of all things.

Well, some of the New York real estate developers are poor, relatively speaking, compared to an investment banker or a trader pulling down a fifty million dollar annual bonus for packaging fraudulent financial instruments. But they are all rich in their well connected friends in the government.

The kleptocracy never sleeps; crony capitalism knows no bounds…

NBC New York
Luxury Condos Asking the Feds For Help
By JUAN DEJESUS 
Fri, Aug 13, 2010

Seek FHA insurance to drive condo sales

The federal government may soon come to the rescue of stalled luxury condominiums in Manhattan.

Manhattan luxury condominiums known for posh amenities and high price tags are beginning to apply for Federal Housing Administration backing.

Condominium developers hope to open financing opportunities for their purchasers as well as guarantee a little protection for themselves. Not only will lending institutions be more willing to lend to purchasers with FHA backing, but the FHA will pay the mortgage should a home buyer default.

The FHA loosened the condo rules because of “market conditions,” Lemar Wooley, an agency spokesman told Bloomberg.com

The administration recently agreed to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo in Match, according to Bloomberg. That deal allowed buyers to make a down payment of as low as 3.5 percent in a complex where apartments run up to $3 million


Tags: , , , , ,




December 2009 Non-Farm Payrolls Report Preview and Forecast

December 2009 Non-Farm Payrolls Report Preview and Forecast

Courtesy of Jesse’s Café Américain

As you may know, and as we suggested the other day, the ADP report, based on payroll data from American business, showed a loss of 84,000 jobs in December, versus expectations of a loss of only 75,000 jobs.

We also suggested that this Friday’s US Non-Farm Payroll Report will be a positive surprise, at least 10,000 or so jobs to the good. Here are the details.

The Imaginary Jobs component, also known as the Bureau of Labor Statistics Birth-Death Model, will contribute approximately 72,000 jobs allegedly created by small businesses with less credible evidence than a Bigfoot or an Elvis sighting.

Not that they are always positive. Each January there is an enormous job loss shown here, in the neighborhood of about 350,000 jobs. The reason they do this is because the seasonal adjustment factor is so huge in January that this imaginary jobs number does not matter, since it is subtracted (and added) from the numbers prior to the seasonal adjustment.

We can expect this model to continue to show positive annual jobs growth until the End of Days, and perhaps longer than that if there is fireproof paper in the afterlife. [click on tables and charts to enlarge]

The ‘headline jobs number’ which is the Seasonally Adjusted Number will be a positive 58,000 jobs, and provide much joy and exultation in Washington and on Wall Street. Pundits like Paul Krugman will caution that the economy is still fragile and a second stimulus bill will be required to insure these positive gains.

What is the basis for these projected numbers? The same basis used by the BLS – nothing. At least nothing connected with the real world. These are the numbers that bureaucrats might mindlessly crank out in response to the desire of their bosses for certain targets, a phenomenon well understood by most corporate financial staffs.

We drew the trendline on that chart earlier this year, assuming that the government would wish to show a steady job increase with a positive number by December, or at least January. So far we have not been disappointed, although there have been quite a few revisions along the way.

There will also be revisions this time again, with some jobs added and borrowed from prior months to help


continue reading


Tags: , , , , , , ,




Big Banks: “You Will Cancel FASB 166 So We Can Continue Pretending All Is Good… Or We Will Kill Lending Even More”

Big Banks: "You Will Cancel FASB 166 So We Can Continue Pretending All Is Good… Or We Will Kill Lending Even More"

threatsCourtesy of Zero Hedge

At first it was just the smaller banks, but now the big boys have joined the collective cry against FASB 166 and 167, according to which beginning January 1, banks will likely see up to $900 billion in off-balance sheet assets being onboarded to bank balance sheets. This would likely mean banks need to dramatically increase their Tangible and Tier 1 Capital to offset the capital needed to account for possible asset deterioration. And that, of course, is unacceptable to banks who know too well the deep shit they still find themselves in.

The irony is that banks, which have already virtually halted lending to those in need of credit, are threatening they will cut any available credit even futher. How anyone could admit to being stupid enough to believe this latest episode of Mutual Assured Destruction courtesy of the US banking system is a mystery. And yet this is precisely the type of "gun against the head" negotiating that Max Keiser was fulminating against, and that the banks are once again perpetrating:

“With any increase in required capital, a banking institution is likely to reduce the amount of lending using such securitization vehicles, as well as other lending,” the American Bankers Association wrote in a letter to regulators. The association, the nation’s biggest banking lobby, suggested that any transition period should be three years at least, with no change in regulatory capital impact in the first year.

Taking a cue from the ABA, the big 3 record earners have decided to join in: last thing one would want is JPMorgan not earning yet another record amount in Q4. First Citi chimes in:

Banks should be given three years to raise capital for offsetting assets and liabilities that must be brought onto their balance sheets, Citigroup Chief Financial Officer John Gerspach said yesterday in a letter to regulators. Requiring banks to “assume the risk-based capital effects immediately, or even over one year, is an undeniably severe penalty,” he wrote.

Then you have record earner JPMorgan:

The capital requirements “will have a significant and negative impact on the amount of consumer-conduit funding that will be made available by U.S. banks,” said


continue reading


Tags: , , , , , , ,




Deregulation as crony capitalism

Edward at Credit Writedowns had some interesting comments on the earlier post by Jesse at the Le Cafe.

Deregulation as crony capitalism

kleptocracyCourtesy of Edward Harrison at Credit Writedowns 

Jesse of Jesse’s Café Américain posted on the important subject of deregulation in his last post, “Why the Austrian, Keynesian, Marxist, Monetarist, and Neo-Liberal Economists Are All Wrong.” In it, he opined that it is entirely wrong-headed to assume everything will be alright if we just let free markets work their magic. I want to take his thoughts one step further because I think there is a misperception about what the free market entails and why the deregulation movement went astray.

Kleptocracy defined

First, a framework.

Last March, I posted an article called “A populist interpretation of the latest Boom-Bust cycle” in which I used Jared’ Diamond’s viewpoint of stratified societies as Kleptocracies as a lens through which to understand the secular trends which have characterized the last generation of western economic history.

To review, Diamond won a Pulitzer Prize in 1998 for his book Guns, Germ and Steel, which is a narrative of how Eurasian societies as a whole have dominated others throughout the last 10,000-odd years.  One of his basic premises is that Eurasian societies are stratified, and hence less egalitarian, allowing individuals to specialize. The hierarchy and specialization have combined to give these societies advantages that less stratified (and less resource-rich) societies do not have.

The corollary of this – and where I want to concentrate – is that advanced societies are not egalitarian. Some will de facto have more, and others will have less.  Moreover, as Diamond asserts, this lack of equality becomes, in essence, a kleptocracy i.e. a reverse Robin Hood organization where the elites enrich themselves at the expense of the others.

This has been the reality in all advanced societies based on agriculture, manufacturing and services for the last 10,000-odd years. This social structure has been net beneficial to the societies employing it in comparison to more simple societies – a case of a rising tide lifting all boats. So, on some level, kleptocracy is nothing about which to get irate.

kleptocracyThe problem is that not all kleptocracies are created equal. At some point, the ruling class overreaches in a way that subtracts from rather than adds to the overall…
continue reading


Tags: , , ,




 
 
 

Zero Hedge

The Real Story Behind Goldman's Q2 Trading Loss: How A $100M Gas Bet Went Awry

Courtesy of ZeroHedge. View original post here.

Goldman Sachs FICC-trading income was an unexpectedly ugly blemish on what was already a poor Q2 earnings report. And while the FDIC-backed hedge fund initially blamed the decline on lower trading revenues, lack of volatility and depressed client activity...

... there was more to the story. T...



more from Tyler

ValueWalk

The Entire Medical Industry Is About To Change

By The Sovereign Investor. Originally published at ValueWalk.

The doctor straightened and pulled the stethoscope from her ears. “I don’t hear anything on the right side.”

Sometimes silence is a good sign. When it comes to listening to my husband breathing, it’s not.

One quick X-ray later and we discover that his right lung had collapsed. There was also air putting pressure on his left lung.

The fix was easy. The doctor inserted a slender tube into his chest, sucking out the air. His lung reinflated in a matter of minutes.

I caught the doctor later and asked her why this had happened. When the pain started, he’d been watching TV.

She shrugged and admitted that sometimes it was just something that happened to men who are tall and thin.

Of course, the answer to the question of “How do we avoid this?”...



more from ValueWalk

Phil's Favorites

Investment Advice in Four Words: Have Patience, Avoid Bubbles

Courtesy of Mish.

A relations manager for Ted Thomas reached out last week and asked: “What is your most valuable advice to people who are beginner investors so that they can get great results in the long term?”

The answer form had no formatting options. Here is a detailed response, with links.

Have Patience, Avoid Bubbles

The TINA theory (there is no alternative other than stocks and bonds) is a path to poor returns.

Cash and gold are indeed options. I discussed TINA in Median Price-to-Revenue Ratio Higher in All Deciles vs 2007, 90% vs Dot-Com Bubble: THE Choice

I recently discussed gold in ...



more from Ilene

Insider Scoop

Things To Like, Things To Watch At The Gap

Courtesy of Benzinga.

Related GPS 20 Stocks Moving In Friday's Pre-Market Session A Peek Into The Markets: U.S. Stock Futures Edge Higher Ahead Of Consumer Sentiment Repor...

http://www.insidercow.com/ more from Insider

Chart School

Volatility on the Rise

Courtesy of Declan.

Today's losses look big on current charts but in a historic context, they weren't too severe. However, big red bars are not to be ignored and 'market leading' Small Caps have felt the full brunt of the selling from July which is bad news for the broader market.  Today's losses in the Russell 2000 undercut the 200-day MA leaving 1,345 as next support (of which I would not be too confident of it holding).


If the Russell 2000 gives up 1,350s then a drop to 1,150s could be on the cards. Things could get ugly if this scenario pl...

more from Chart School

Digital Currencies

Ukrainian Lawmakers Disclose $45 Million In Bitcoin Holdings

Courtesy of ZeroHedge. View original post here.

As Ukraine's crackdown on corruption continues, three lawmakers from Ukraine’s ruling party revealed this week that they own a combined $45 million in bitcoin, according to a report by RIA Novosti, a Russian foreign news service.

Their holdings came to light during mandatory financial disclosures by members of the Ukrainian parliament, part of an IMF-approved strategy to tamp down corruption in Ukraine. The country's democratic institutions, which were never very robust to begin with, have been further destabilized by...



more from Bitcoin

OpTrader

Swing trading portfolio - week of August 14th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Biotech

Editing human embryos with CRISPR is moving ahead - now's the time to work out the ethics

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Editing human embryos with CRISPR is moving ahead – now's the time to work out the ethics

Courtesy of Jessica BergCase Western Reserve University

There’s still a way to go from editing single-cell embryos to a full-term ‘designer baby.’ ZEISS Microscopy, CC BY-SA

The announcement by researchers in Portland, Oregon that they’ve successfully modified the genetic m...



more from Biotech

Members' Corner

Why we need to act on climate change now

 

Why we need to act on climate change now

Interview with Jan Dash PhD, by Ilene Carrie, Editor at Phil’s Stock World

Jan Dash PhD is a physicist, an expert at quantitative finance and risk management, and a consultant at Bloomberg LP. In his thought-provoking book, Quantitative Finance and Risk Management, A Physicist's Approach, Jan devotes a chapter to climate change and its long-term systemic risk. In this article, Ilene interviews Jan regarding his thoughts on climate change and the way it can affect our futu...



more from Our Members

Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



more from M.T.M.

Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



more from Promotions

Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



more from Kimble C.S.

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>