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Tuesday, January 31, 2012

Ben Bernanke Versus Your Retirement


Last week Federal Reserve Board Chairman Ben Bernanke reaffirmed the commitment of the Federal Reserve to keep interest rates low for years into the future. The Fed's zero interest rate policy (ZIRP) is designed to feed the profits of Wall Street banks and corporations at the expense of savers and retirees.

Interest income is at the lowest level in 43 years. Bernanke has declared war on retirees by trying to force them to invest in riskier assets like stocks or commodities.

Cramming Fed central planning down the throat of the American public will fail exactly like Soviet Union style central planning eventually failed in the 1980's. But in the end the American public will pay a dear price for following Bernanke economics.

related:
The Mess That Greenspan Made:
Will Ben Bernanke’s War On Savers Kick Off The Long Awaited U.S. Gold Boom? -- 
The Federal Reserve sparked a huge rally in precious metals markets on Wednesday when it forecast super-low interest rates for the next three years and hinted at more money printing to come; the gold price surged more than $50 an ounce within about an hour and silver jumping almost $2 an ounce...
Daily Reckoning:
How Ben Bernanke Rationalizes “Exceptionally Low” Interest Rates -- 
So Mr. Bernanke is fiddling the levers again, promising to keep rates lower than a sea snake’s belly until 2014. He might have just taken out an ad in the front page of the paper:

“Fed to Savers: Go to Hell!” ...

Bernanke’s commitment to holding interest rates “exceptionally low” for an “extended period,” reeks of exactly the kind of insanity required to double down on a bad bet, of repeating the same experiment and expecting a different result...
Bloomberg:
Dollar Tumbles on Fed’s Interest Rate Pledge --
The dollar fell against all its most-traded counterparts after the Federal Reserve pledged to keep interest rates low for at least three years, spurring investors to seek higher-yielding assets...

Monday, January 30, 2012

Flying People Spotted over New York City



TechCrunch:
Flying People Spotted Over New York City…Film At Nine -- 
In a recent publicity venture for their new movie “Chronicle”, 20th Century Fox enlisted the help of viral marketing agency Thinkmodo to design and execute a rather unique campaign element that surely caused several doubletakes over the New York City skyline.

If you thought you saw some flying humans in the sky over parts of New York City and New Jersey in the last couple of weeks you are, in fact, not crazy. You were merely exposed to a new kind of avant garde marketing technique brought to you by the same folks that unleashed the iPad Head Girl a few months back....

Sunday, January 29, 2012

Vaporizing $1.2 Billion in Customer Accounts

There was a shady dude named Corzine,
Who took customer money and put a minus sign,
The Feds were baffled by the caper,
They said the money had turned to vapor,
Sorry poor folk you were screwed by design.
----
The Wall Street Journal reports the shocking story that after three months of investigation federal officials have come to the conclusion that $1.2 billion of customer money at MF Global was "vaporized" when the firm collapsed into bankruptcy on October 31, 2011.

The money was supposedly held in segregated and safeguarded accounts.

Wall Street Journal:
Money From MF Global Feared Gone --
Nearly three months after MF Global Holdings Ltd. collapsed, officials hunting for an estimated $1.2 billion in missing customer money increasingly believe that much of it might never be recovered, according to people familiar with the investigation.

As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation...

Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York company was supposed to keep separate from its own assets—and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

Investigators also are examining other scenarios that have gained traction in recent weeks, such as the possibility that MF Global suffered steep losses on investments made using customer money. Officials investigating the case have looked into whether such investments were appropriate under rules at the time.

As money poured out of MF Global, much of it likely passed through J.P. Morgan Chase & Co. and other banks where the securities firm had accounts, as well as trade-clearing partners such as Depository Trust & Clearing Corp. and LCH.Clearnet Group Ltd., people familiar with the matter said.

Those companies have denied being knowingly in possession of any missing MF Global money, and any efforts to make them fill the hole would face daunting hurdles. And because the firms usually were middlemen between MF Global and other counterparties, the funds they touched were then scattered widely, complicating the search...
discussion:
Zero Hedge:
So one hand, nobody at MF Global was responsible because every member of lower, to middle to upper management was responsible (and certainly not Jon Corzine), secondly, not one regulator was responsible, because every regulator was equally oblivious of the grand theft occurring right under their noses. Finally nobody on the receiving end of this fund flow was responsible, as the money could have ratably gone to one of an infinite number of destinations. And here we were thinking that dilution is only applicable to what the central banks do to their currency. Little did we know that it is the de facto global modus operandi for the systemic fraud endemic in modern finance, whereby not one person is held accountable, as otherwise everyone would be held accountable.

Brilliant...
Zero Hedge:
MF Global Customer Funds Were Not "Vaporized" - Stanley Haar Takes WSJ to Task --
As a individual trader and CTA whose accounts are owed several million dollars by MFGI, I would like to express my shock and disappointment with [yesterday's] front page article; I expected better from the WSJ. Your article gives the appearance of having been ghost written by Andrew Levander and/or the JP Morgan legal department. Among the key errors/omissions:

Client money in segregated bank accounts was not "vaporized"; it was stolen via illegal transfers to support MF's proprietary trading positions and to repay creditors such as JP Morgan. Those transfers are and always were illegal…….even "under rules at the time". Your use of that irrelevant and misleading phrase twice only serves to deflect attention from the criminal acts committed by Corzine, et al....
Jesse's Cafe Americain:
MF Global: A Despicable State of Affairs --
And as we have heard, quite a bit of that money was also diverted in the last few days into the pockets of MF Global's bank, JP Morgan, which still reportedly holds much of it. Now whether they are legally entitled to keep that money is another matter. But this entire charade has been cloaked with a public relations campaign using terms like 'missing,' 'vaporized,' and 'mystery' to describe the customer assets as if no one really knows where the funds had gone, which the CFTC has explicity stated months ago is not the case. And that the handling of the bankruptcy and the method of ordering customers with creditors is in violation of the rule 190 and precedents which established it...

Wednesday, January 25, 2012

Familiar Rhetoric

If you say that we've heard it all before, you would be right. Because it sounds like President Obama gives the same State of the Union speech every year.

The Gingrich Who Stole South Carolina


Jon Stewart of The Daily Show mocks the moral hijinks of Newt "The Gingrich Who Stole South Carolina."

Sunday, January 22, 2012

Friday, January 13, 2012

Burning Money with Warren Buffett

"When you see me reach for the check, you'll know I'm posing." — Warren Buffett
-----
Warren Buffett wants to get into a money burning contest with the Republicans in Congress. You would think that the 2nd richest man in the United States, with a net worth of $39 billion would know something about taxes. He probably does, but he also apparently wants to do some posing while he dares Republicans to donate taxes or burn money with him.

Taxes as we have learned from Modern Monetary Theory (or MMT) are not needed to fund the government. In fact, if you walked into the IRS office and paid you income tax bill in cash they would shred your money in the back room soon after giving you a receipt and crediting your account for the payment.

At first, this is a hard idea to get your brain around. Who for God's sake destroys money? But, the the IRS does not need to send money to the government. The government merely prints new money or more likely just credits accounts when it needs money. The US government does not need the IRS to fund its operations. These are two mutually exclusive operations: creating money and destroying money via taxes.

But, what about the $15 billion dollar federal deficient you ask? Go read up about MMT if you want the answer to that one.

Anyway, the point here is that donating money to the government is a fool's errand. Get it through your head that Uncle Sam does not need your money. The U.S. government taxes mainly to control demand for goods and services and manage the money supply.

So all the people who donate their hard earned money to pay down the Federal deficit are just making work for someone, who has to destroy that money. Of course, if you donate gold Uncle Sam will find a way to keep that.

-----
Rana Foroohar / Swampland:
Warren Buffett Ready to Take Republicans' Tax Challenge  — Warren Buffett is ready to call Republicans' tax bluff. Last fall, Senator Mitch McConnell said that if Buffett were feeling “guilty” about paying too little in taxes, he should “send in a check.” The jab was in response to Buffett’s August 2011 New York Times op-ed, which made hay of the fact that our tax system is so unbalanced, Buffett (worth about $45 billion) pays a lower tax rate than his secretary. Senator John Thune promptly introduced the “Buffett Rule Act,” an option on tax forms that would allow the rich to donate more in taxes to help pay down the national debt. It was, as Buffett told me for this week’s TIME cover story, “a tax policy only a Republican could come up with.” ...
discussion:

Kid Dynamite:
Warren Buffett’s Bizarre Non-Sequitur Challenge to Republicans -- I thought about it for 5 seconds and realized that Buffett is off on a total non-sequitur here...

See, the Republicans’ point is that they don’t think that the rich should have to bear the brunt of the tax burden more than they already do (look: you can agree or disagree with this philosophy, but I think it’s clear that this IS the Republican philosophy. I have no interest in arguing here whether or not it is the correct policy). In other words, the entire Republican point is “WE don’t want to pay any more in taxes, if you think you aren’t taxed enough, then YOU are free to pay more in taxes.“ Thus, calling out Mitch McConnell like this, while sure to grab headlines, and result in high fives and “OH NO YOU DI’INTS” amongst liberals, makes no sense...

Bruce McQuain / Questions and Observations:
Buffett: bluffs and buffoonery  — What “bluff”? I don’t recall any of the Republicans in question complaining they paid too little in taxes, do you?

Instead it was about Buffet claiming he paid to little in taxes and his further claim that he was willing to pay more. What Republicans then promptly suggested is that he do so and even provided him an address to where he could send his voluntary contribution. They also insisted that taxes were high enough for all and that Buffett should speak for himself.

Now, at least as I see it, he’s trying to wiggle out of it by citing some sort of non-existent bluff which requires payment by Republicans before he is willing to pay.

Man up Warren Buffet … You made the claim and were provided with a solution. This has nothing to do with others paying as well, this is your baby.

Put up or shut up about paying more in taxes. You’ve become more than tiresome.
-----
Daniel Strauss / The Hill:
Warren Buffett: I'll match any Republican donation to pay down the federal debt  — Business mogul Warren Buffet is promising to match any donation Republican members make toward cutting the national deficit.

And he upped the ante when it came to Senate Minority Leader Mitch McConnell (R-Ky.), saying he would match the leader's donations three-to-one.

His pledge comes after McConnell said that if Buffett is feeling guilty about not paying more in taxes, he should just send in a check...
-----
Dear Mr. Buffett,...

You know what the Good Book has to say about charity, right? We can turn to Matthew 6:1

“Beware of practicing your righteousness before other people in order to be seen by them, for then you will have no reward from your Father who is in heaven. Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you.”
-----
Ryan Mac / Forbes: Warren Buffett Throws Down Gauntlet To McConnell, GOP; Challenges Them To Donate

Wednesday, January 11, 2012

America at Work and not at Work

Atlantic Magazine has an interesting photo essay.

Atlantic Magazine:
America At Work --

According to the latest jobs numbers, issued by the Labor Department on January 6, the U.S. unemployment rate has dropped to 8.5 percent, down from 10 percent in 2009. The Great Recession has claimed more than 8.5 million jobs since 2007, and even though the current trajectory of the U.S. appears to be toward recovery, Americans are still struggling to find work. Nine of the photographs below appear in The Atlantic's January/February 2012 print issue, and I've added 25 more here to round out a collection of images from these years of uncertainty -- of men and women both at work and out of work in the United States.
Dental assistant student Travis Bell, 32, of Randolph, Massachusetts, practices taking an X-ray on Dexter the dummy during a lab in a diagnostic assisting class at Kaplan Career Institute, on September 4, 2009 in Boston. Bell was laid off from a car part manufacturer and is now collecting unemployment while he takes classes in dental assisting. The teeth in the dummy are real human teeth.

Tuesday, January 10, 2012

Mitt Romney's $12 Million Teardown House in La Jolla

San Diego Realtor Jim Klinge does a quick tour of Mitt Romney's La Jolla, CA house. Romney bought the house in 2008 for $12 million, and according to Jim the house is going to be torn down and replaced with a new 8,100 square foot home. That is smaller than the 11,062-square-foot property he initially wanted to build last summer.

----
View from the beach of the 3,009-square-foot Romney home in La Jolla , which the GOP contender plans to demolish and replace with an 8,100-square-foot home
----


----
related:
Huffington Post:
Romney to quadruple La Jolla home size --
Mitt Romney is looking to quadruple the size of his $12 million California home, the San Diego Union-Tribune reports.

The GOP presidential candidate has filed an application with the San Diego government to bulldoze the 3,009-square-foot beachfront house in La Jolla and replace it with a 11,062-square-foot property.

According to a campaign official, "They want to enlarge their two bedroom home because with five married sons and 16 grandchildren it is inadequate for their needs."

In addition to the California house and a townhouse outside of Boston, which is their official primary residence, the Romneys own a $10 million vacation home on the shore of Lake Winnipesaukee in Wolfeboro, N.H...
----
San Diego Union:
Romney to quadruple La Jolla home size --
Romney has filed an application with the city to bulldoze his 3,009-square-foot, single-story home at 311 Dunemere Dr. and replace it with a two-story, 11,062-square-foot structure. No date has been set to consider the proposed coastal development and site development permits, which must be approved by the city.

The former governor of Massachusetts purchased the home three years ago. According to a description from the listing agent, the Spanish-style residence at the end of a quiet cul-de-sac is sophisticated and understated in its dĂ©cor, “offering complete privacy and unsurpassed elegance.”

Tentative plans call for new retaining walls and a relocated driveway, but would retain the existing lap pool and spa.

“This offering represents a truly unique opportunity for a buyer who appreciates the scarcity of this caliber of real estate,” the listing said.

Constructed in 1936, the three-bedroom, 4.5-bathroom home was among the first built in the Barber tract neighborhood, according to the La Jolla Historical Society, and has a stretch of lawn sloping to the white sand beach...
NPR:
Romney's $12 Million Tear-Down: His Small Way To Boost Housing Sector?

Thursday, January 5, 2012

Obama Kills the Bill of Rights

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety. – Benjamin Franklin
-----
On New Year's Eve President Obama, threw the U.S. Constitution and the Bill of Rights in a paper shredder. While everyone was focused on the New Year's Eve celebrations, and while he was vacationing in Hawaii with his family, Obama signed a rights destroying $662 billion military spending bill. The law, called H.R.1540 - National Defense Authorization Act for Fiscal Year 2012, sneaks in through the backdoor the authority of the U.S. government to indefinitely detain U.S. citizens without a trial.

Hopefully, the Supreme Court will get a chance to rule this garbage law is unconstitutional. The law clearly violates the 4th Amendment of the Constitution. But, until then Uncle Sam's minions can lock down any U.S. citizen in military prison and throw away the key.

Critics on both the left and right assailed this sneak attack on our Constitutional rights.


FoxNews:
Obama Signs Defense Bill Despite 'Reservations' --
HONOLULU – President Barack Obama signed a wide-ranging defense bill into law Saturday despite having "serious reservations" about provisions that regulate the detention, interrogation and prosecution of suspected terrorists.

In a statement accompanying his signature, the president chastised some lawmakers for what he contended was their attempts to use the bill to restrict the ability of counterterrorism officials to protect the country.

Administration officials said Obama was only signing the measure because Congress made minimally acceptable changes that no longer challenged the president's terrorism-fighting ability...
----
Mish Sherlock:
Obama Signs Legislation Killing Bill of Rights

Obama's Blatant Hypocrisy

The "reservations" Obama has are of his own making. Please consider this skewering of President Obama by Rachel Maddow.




Jon Stewart on Comedy Central's Daily Show also tears apart this law.
The Senate passes a bill that jeopardizes Americans' civil rights....
Can anyone derail this one way train to Gitmo?
-----
discussion:
NY Times: After Struggle on Detainees, Obama Signs Defense Bill

Right, Wing-Nut: Obama Shreds The Constitution, Media Whoops With Joy
Adam Clark Estes / The Atlantic Wire:
Obama Makes It Official: Suspected Terrorists Can Be Indefinitely Detained Without a Trial  —  Despite having once threatened to veto the bill due to controversial language about the treatment of suspected terrorists, the president signed the controversial National Defense Authorization Act (NDAA) into law on Saturday...

This is the same bill that Ron Paul recently compared to the Patriot Act but with more dire implications. "When the bar is low enough to include political enemies, our descent into totalitarianism is virtually assured," Paul said earlier this week. "The recently passed National Defense Authorization Act continues that slip into tyranny, and in fact, accelerates it significantly."

Sara Sorcher / NationalJournal.com:
Obama Signs Defense Authorization Bill  —  President Obama signed on Saturday the defense authorization bill, formally ending weeks of heated debate in Congress and intense lobbying by the administration to strip controversial provisions requiring the transfer of some terror suspects to military custody...

Many Democrats and human-rights groups have decried the bill’s language that would allow indefinite detention for suspected terrorists without a trial--including Americans arrested in the United States...

Judd Legum / ThinkProgress:
BREAKING: Obama Signs Defense Authorization Bill  —  This afternoon, Obama signed the controversial Defense authorization bill, despite his reservations about provisions related to the treatment of terrorism suspects.  The National Journal reports: … The AP has more from the signing statement …

David Nakamura / Washington Post:
Obama signs defense bill, pledges to maintain legal rights of U.S. citizens  —  HONOLULU — President Obama expressed misgivings about several provisions of a sweeping defense bill he signed into law on Saturday, pledging that his administration will use broad discretion in interpreting …

ZeroHedge:
"Guantánamo Forever?" - Congress Passes $662 Billion Defense Bill, Aka The NDAA

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