Scottish Independence Referendum: The Complete Summary

For those just catching up on the main news event of the weekend, namely the sudden surge in Scotland “Yes” vote polling surpassing 50% for the first time, here is a complete round up of the background, updates and expert reactions from RanSquawk, Bloomberg and AFP.
ANALYSIS: THE CASE OF SCOTTISH INDEPENDENCE
Recent polling shows the ‘Yes’ campaign overtaking the unionists for the first time, just 10 days ahead of the final vote on September 18th Independent Scotland runs the risk of limited currency options and fiscal uncertainty UK debt ratings hang in the balance as worst-case scenario sees Westminster shouldering an estimated extra GBP 140bln in former Scottish debt BACKGROUND
The ‘No’ party – the unionists – are led by Alistair Darling, former Chancellor of the Exchequer, previously held a lead over the nationalists but this has reversed in the most recent polling, with the ‘No’ vote holding 49%.
The ‘Yes’ party – the nationalists – are led by Alex Salmond, Scotland’s First Minister, and harbour hopes of swinging the referendum in their favour as latest polls suggest they have been overtaken the ‘No’ camp by 2ppts.
Serious doubts remain over the future of Scotland’s currency if the nationalists win. Salmond has repeatedly stated his intention of keeping the GBP, but all 3 main UK parties have made clear they would not be willing to share their currency and central bank with a foreign state. Also, a potential use of the GBP without a currency union would not be compatible with EU membership, as the EC requires member states to have a monetary authority of their own.
HOW WILL THE MARKET REACT?
‘No’ Victory – Given the somewhat complacent attitude market participants have had towards the vote indicates that the upside in riskier assets is limited in case the unionists win the referendum with a large majority. Nevertheless, expect to see some tightening in spreads of the shorter-dated implied volatilities which have widened heading into the risk event.
However, a close vote could lead to a second referendum in 5-10 years and as such, changes to UK regional governance would take place as a result of more devolution, with additional powers going to Scotland such as more autonomy over taxation. In turn, business leaders, including the head of Standard Life and RBS, will have to decide as to whether to relocate their headquarters to the UK or stay in Scotland depending on what type of policies Scotland decides to pursue with its additional powers.
‘Yes’ Victory – Great uncertainty revolves around an independent Scotland, specifically due to the lack of clarity over the potential new fiscal arrangements such as interest rates, taxation, investor protection, financial stability and monetary policy.

This post was published at Zero Hedge on 09/08/2014.

Here Is Why Europe Just Launched The “Nuclear Option” Against Russia

Europe’s leaders, we assume under pressure from Washington, appear to be making a big weather-related bet with their taxpayers’ lives this winter. As they unleash funding sanctions on Russia’s big energy producers, Europe has pumped a record volume of natural gas into underground inventories in an effort to ‘outlast’ Russia and mitigate any Napoleonic “Winter War” scenario. The plan appears to be to starve Russian energy firms of cashflow – as flows to Europe are already plunging – and remove their funding ability, potentially forcing severe hardship on Russia’s key economic drivers. There appears to be 3 potential problems with this plan…

This post was published at Zero Hedge on 09/08/2014.

EU – Nothing Works, Not Even Stimulation

Mario Draghi cannot launch QE without German political assent … It is surely wishful thinking to suppose that the ECB is ready to launch full-fledged QE, given its political make-up … Mario Draghi’s comments on the eurozone economy at Jackson Hole have put him in direct conflict with Berlin – UK Telegraph
Dominant Social Theme: These last five years have been a problem, but now you can smell the hope and change.
Free-Market Analysis: We’ve written regularly about the difficulties with the EU for years and what’s astonishing is that almost all of our predictions about its dysfunctional nature – and predictable results – have been realized, and yet the EU staggers on.
There were even, as we anticipated, street demos and open rebellion in parts of the EU at the height of the current crisis. Athens was bloodied and Spain, Italy and Portugal among other countries saw serious unrest, especially among youth. And yet, surprisingly, the EU withstood the blows primarily through the use of uncompromising political, civilian and military force. The elites were not afraid to “crack heads.”
It is Southern Europe that has borne the brunt: Taxes have risen, services have been cut and formal employment has never returned. Young people have little work; older workers cannot trust the vaunted EU safety net. Retirements have been put off. Poverty has risen.
Enter Mario Draghi and the Eurocrats once again to salvage a continually unsalvageable mess. Draghi intends to print lots of money in order to buy securities in the open market, presumably including national and EU debt.

This post was published at The Daily Bell on September 08, 2014.

OMGodzilla! Japanese Macro Data Revisions Even More Disastrous Than Expected

If the US equity market’s reaction to the worst jobs data of 2014 is anything to go on; Japanese stocks should be a double overnight given the catastrophe that just printed. While the initial prints for the post-tax-hike period were bad enough (record worst levels in most cases), the revsions are even worse. Drum roll please: 1) Trade balance miss, worst in 4 months; 2) GDP -7.1% miss, revised down, worst since Q1 2009; 3) Business Spending/Capex -5.1% miss, revised down, worst since Q2 2009; and 4) Consumer Spending -5.3% miss, revised down, worst on record. But apart from that, as the Japanese leaders noted last week, “the recovery is heading in the right direction.”

This post was published at Zero Hedge on 09/07/2014.

CALIFORNIA MAYORAL CANDIDATE WANTS TO FREE BITCOINERS OF THE INCOME TAX – TDV WEEK IN REVIEW: SEPTEMBER 7TH, 2014

Another US political candidate is advocating the use of Bitcoin. Instead of just accepting the crypto-currency for donations, this candidate has taken it one step further.
Alex Fidel is running for mayor in the city of Encinitas, California, a suburb of San Diego famous for its surf culture and the YMCA skate park.
He’s looking to put Encinitas on the map for another reason than sunny climes, beautiful people, beach-town vibes, and so on. He wants the Southern California coastal town to be a Bitcoin safehaven from what he terms the ‘conjoined twins of the Federal Reserve and the IRS.’
One of the 22-year old candidate’s main talking points is the nullification of legal tender laws by elevating the importance of the US Constitution’s Tenth Amendment.
‘I would nullify legal tender laws and money exchange laws to allow individuals to engage in the currency of their choosing, whether it be gold, silver, copper, Bitcoin, voluntary exchange, or even the devaluing Federal Reserve Note dollar system for those that wish to stick with the pyramid scheme,’ the candidate wrote on his Facebook page.
On a recent appearance on The Our Very Own Special Show Podcast, the candidate proposed that the income tax apply only to the US Dollar, absolving bitcoin, precious metals and other alternative currency users of paying the income tax. (That part starts at 58 minutes)
‘… The Fed and IRS were both created in 1913 as one entity. The income tax should only apply to Federal Reserve Notes, so if you’re a major corporation using Federal Reserve Notes, it’s probably because you’re connected to the banks. It will be mostly small business that stop using the corporate-fascist medium. Exempting alternative currencies from the income tax would be good for employment, and the dollar would lose value. People would only have to report taxes if they use the federal reserve note.’
That’s a lot of upheaval. So what does this all mean?
‘You wouldn’t be a slave to the dollar system,’ the candidate says.

This post was published at Dollar Vigilante on 2014/9/7.

Personal Responsibility and Free-Market Entrepreneurship

A recent, little discussed article about Russia’s signing of US FATCA legislation contained a surprising confessionary note – and an important one.
The main news was simple enough, of course. Vladimir Putin has signed Russian legislation mandating potential cooperation with US taxing authorities.
It was reported he did not do so willingly – and indeed, the RT (formerly Russia Today) broadcast network presented the news in that context.
Here’s part of the RT report:
Russia sees serious threat in FATCA … Russia’s financial system is “threatened” by America’s new tax law that demands foreign banks report on all American citizens’ banking activities, the Russian Federal Financial Monitoring Service said Thursday.
The head of the financial monitoring authority Yury Chikhanchin likened the one-sided data exchange to turning Russian banks into spies for the Americans. “Essentially, our financial institutions are becoming tax informants for the American economy. As similar systems start spreading to other countries, they can bring serious risks to our financial system,” Chikhanchin said at a banking forum in Sochi.
FATCA requires foreign banks to provide information on American clients, who have over $10,000 in deposits, to the US Internal Revenue Service (IRS). If a bank does not comply; it can be subject to a 30 percent fine. Before client information is sent to America, it will pass through the Central Bank of Russia and other local financial or government agencies, which still have the right to keep the information private.
On June 30, just before the deadline, Russia signed a law that allows Russian banks to share the tax data of American clients with US tax authorities, but does not mandate participation. The law simply gives Russian banks the ability to work with FATCA while not making it obligatory.
So far, this is unsurprising. The report and Russia’s dissatisfaction with FATCA didn’t get a great deal of play in Western media, any more than the signing itself.

This post was published at The Daily Bell on September 06, 2014.

Report: It’s YOUR Fault: Fed Says Americans Who ‘Hoard Money’ Are To Blame For Poor Economy

Despite arguments to the contrary from the Obama administration, mounting evidence suggests that the U. S. economy is rapidly falling back into negative growth territory. More Americans are out of the workforce than ever before, median household incomes are at levels not seen since 1967, and consumer spending is coming to a veritable standstill. The crisis is apparently so significant that a Federal Reserve governor recently said U. S. policymakers are crafting regulations that will force bank depositors to cover any losses should their financial institutions fail.
The question that many are asking is, how did this happen? How, after six years of recovery efforts and trillions of dollars printed, is it possible that the economy is not booming again?
This week the Federal Reserve published a report that claims to have figured it out and it turns out that the renewed economic downturn has nothing to do with foreign outsourcing, high taxation, increased health care costs for business or rising consumer prices for food and energy.
No, according to the Fed it is your fault. Apparently, you are not spending enough money. In order for the economy to recover you need to stop hoarding cash now and get out there and start buying more homes, cars, vacations, and electronics. Otherwise, you’ll only have yourself to blame when the system comes unhinged.
From the St. Louis Federal Reserve:
The issue has to do with the velocity of money, which has never been constant, as can be seen in the figure below . If for some reason the money velocity declines rapidly during an expansionary monetary policy period, it can offset the increase in money supply and even lead to deflation instead of inflation.

This post was published at shtfplan on September 6th, 2014.

Japan’s “Money Illusion” Will Fail, Goldman Warns

The Bank Of Japan (BOJ) says it is looking for consumer spending to stay on a recovery path, focusing on the relatively small increase in nominal wages rather than the steep slide in real wages. Goldman believes the BOJ’s view is founded on money illusion; and crucially, expect the positive effects to be clearly outweighed by the negative impact of lower real wages, and on a net basis see consumption falling. Simply put, once people wake up to the illusion of money, its impact will also fade.
Via Goldman Sachs’ Naohiko Baba,
Can the BOJ rely on ‘Money Illusion’? (Spoiler Alert – No!)
Nominal wages have finally edged into positive territory after more than 18 months of Abenomics. However, prices have spiked on cost-push inflation driven by yen depreciation since mid-2013and on the consumption tax hike in April 2014 (from 5% to 8%). As a result, real wages were still in negative territory (-1.4% yoy) even as of July, when the outcome of the successful spring wage negotiations should have been almost fully factored in.

This post was published at Zero Hedge on 09/05/2014.

THERE GOES THE JOBS RECOVERY STORYLINE

The Wall Street jackoffs all expected an increase in jobs of 200,000 to 250,000 for August. I guess being off by 30% to 40% is considered accurate for an Ivy League educated economist making over $1 million per year. The manipulated, massaged, seasonally adjusted, excel spreadsheet employment data has been released for public consumption by our keepers. They will now tell you what you are supposed to believe regarding the fake numbers. Maybe the weather was too warm for hiring. Maybe it rained or didn’t rain. Maybe ISIS and the looming threat of terrorist attack is deterring employers from hiring. It couldn’t have anything to do with Obamacare, Federal Reserve policies, government regulations and taxes, or the fact that families have 40% less net worth today than they had in 2007.
It’s actually far worse than the reported headline. One survey says 142,000 jobs were added. Of course the BLS excel spreadsheet birth/death adjustment added 102,000 jobs to the calculation, the highest adjustment for August in history. We all know small businesses are hiring like mad before full implementation of Obamacare after the elections. The broader population survey shows that only 16,000 more people were employed in August than in July. The MSM is silent about that number. The sheep must be kept sedated. And now for the best part. While reporting horrifically bad employment numbers, our beloved BLS drones also reported the unemployment rate dropping to 6.1%, the lowest rate in six years. Glory be!!! The economy must be booming and workers must be so ecstatic they are spending like there’s no tomorrow. What? Retail sales have been declining? How can this be? It sure smells like someone took a shit under the bed and won’t admit it. But let’s ignore the cognitive dissonance you are feeling and dig into the bullshit BLS numbers to get a few kernels of truth:

This post was published at The Burning Platform on Sept 5, 2014.

ECB Now a Hedge Fund; 1T Bazooka; ECB Promotes Euro Carry Trade; Draghi Has it Backwards

Draghi Has it Backwards
A director at a global financial company with offices worldwide pinged me in response to my post ECB’s 40bn Stimulus Gamble: ECB Pulls Out Bazooka, Cuts Rates, Buys Assets; Will this Stimulate Lending?.
Hello Mish,
Mario Draghi is an idiot. Banks create money when they lend. The loans create a requirement for reserves which ultimately reverts back as deposits at the ECB. The negative interest rate is therefore a tax on capital and a tax on lending. This not rocket science.
I’d start a charity whereby every newly appointed central bank board member is sent a free copy of Rothbard’s Mystery of Banking except I am beginning to doubt their ability to read.
Name Withheld by Request
Bond Bubble GrowsI responded to “NW” with “I agree 100%. All they have done is give banks the incentive to park money on sovereign bonds with diminishing yield. The bond bubble grows.“It is ridiculous that Spanish and Italian 10-Year bonds trade at a lower yield than 10-year us treasuries, yet that is the current state of affairs.

This post was published at Global Economic Analysis on Friday, September 05, 2014.

Travails of an American Tax-Victim Overseas

In a recent article on LRC, tax specialist and Forbes columnist Robert Wood shared a letter that one of his clients, Marilyn, had sent to President Obama about the travails of being a US Citizen who lives outside of the good ol USA. In order to explain more fully what is going on with offshore citizens, I’ve taken the liberty of writing a response from President Obama. I’m in the same boat as Marilyn and have suffered from the same outrageously punitive and discriminatory rules that she has.
Dear Marilyn,
My staff mentioned that we received your letter and that you were considering ending your status as US citizen because of my rules on reporting foreign financial accounts and treatment of foreign mutual funds. I know there’s lot’s of folks just like you who live offshore, so we’ve come up with some responses to your concerns.
Yes, my FBAR form has draconian penalties if you don’t fill out the paperwork for all of your financial accounts correctly [rubs palms together]. To make things easier on you, I’ve instructed the IRS to institute a voluntary disclosure program for people who don’t fill out the paperwork correctly. You tell us everything and we’ll consider only taking half instead of all of the account balance and we’ll even consider waiving the 5 year jail sentence in most cases. According to a precise reading of the rules, we could fine you far more than the account balance, so be thankful.
And to further ease your burden of running to the post office and mailing in your account information on the FBAR form each year, the form is no longer accepted by mail. If you’re foolish enough to mail in the form in order to report your accounts, we’ll treat that form as evidence of non reporting, subjecting you to the draconian penalties. [smirks and covers mouth with his hand]. I’ve also given the form a more user friendly name. Instead of FBAR, it’s called FinCEN Form 144(a). Your high priced tax guy can send in the information via the internet, where you can be sure the information is safe. [giggles]

This post was published at Lew Rockwell on September 4, 2014.

Do You Receive Free Lunch at Work? The IRS Wants to Tax it…

The IRS. There are few agencies more hated, corrupt, and degraded in the entire nation, and that’s saying a lot.
Unless you have been living under a rock for the past couple of years, you are well aware of the fact that the IRS was caught consistently abusing its extraordinary power in order to selectively target groups with which leadership disagreed with politically.
We also know that the IRS, and its former director of the Exempt Organizations Unit, Lois Lerner, subsequently destroyed evidence of misconduct by claiming emails had been lost and are unrecoverable, in a ludicrous series of purported events.
I thought the following Tweet summarized my sentiments as well as anything else I have seen…

This post was published at Liberty Blitzkrieg on Sep 4, 2014.

‘Now We Are At The Lower Bound’: Draghi Reaches The Dead-End Of Keynesian Central Banking

Europe is not growing much because most of its economies have been crushed under a mountain of debt, taxes, welfarism and statist dirigisme. Yet somehow the foolish pettifogger running the ECB thinks that driving the cost of money to the ‘lower bound’ (i.e. zero) will help overcome these insuperable – and government made – barriers to prosperity.
Yet in today’s financialized economies, zero cost money has but one use: It gifts speculators with free COGS (cost of goods sold) on their carry trades. Indeed, today’s 10 basis point cut by the ECB is in itself screaming proof that central bankers are lost in a Keynesian dead-end.
You see, Mario, no Frenchman worried about his job is going to buy a new car on credit just because his loan cost drops by a trivial $2 per month, nor will a rounding error improvement in business loan rates cause Italian companies parched for customers to stock up on more inventory or machines. In fact, at the zero bound the only place that today’s microscopic rate cut is meaningful is on the London hedge fund’s spread on German bunds yielding 97 bps – -which are now presumably fundable on repo at 10 bps less.
Needless to say, when your only tool is a hammer, everything looks like a nail. And when you are a Keynesian with a hammer, it is presumed that nothing much was hammered before yesterday. That is to say, the whole mindless drive by the ECB toward the zero bound, which Draghi pointedly claimed to have achieved this morning, presumes that balance sheets – – the accumulated record of past actions – don’t matter.
Instead, its all about the credit ‘flow’ today and tomorrow. Accordingly, lower interest rates – no matter how trivial the change – are ritualistically presumed to stimulate more borrowing in the real economy, and therefore more spending, income and virtuous circle of Keynesian growth.

This post was published at David Stockmans Contra Corner on September 4, 2014.

Federal Reserve Warns That “College May Not Pay Off for Everyone”

Back in May, the one regional Fed that has come to symbolize everything that is wrong with being a “master of the obvious”, and conducting pre-K level research at the expense of millions in dollars in taxpayer funds, and also the Fed where the current Fed charimanwoman emerges from, that of San Francisco of course, conducted one of its trademark frontal lobe-combusting “studies.” Specifically, that purveyos of intellectual titanism asked (and answered) “Is It Still Worth Going to College?” The SF Fed’s answer, in a nutshell, was a resounding “yes” as one would expect of course: because in a world in which marginal revolving debt demand is virtually zero, the only source of consumer credit – that opiate for the Keynesian masses and certainly for their shamans – for the past five years, is simple: car loans and, to a far greater degree, student loans.
Which is why we were shocked to find today that the “other” Fed, the one housing the most powerful trading desk in the known world, that located at Liberty 33, today issued a research piece with a very different conclusion, namely that “College may not pay off for everyone.” But… that does not jive with the west coast Fed’s kindergarten level, blanket summary. How is this east-vs-west coast Fed rivalry possible?
For the answer, we go to the NY Fed’s paper, presented below.

This post was published at Zero Hedge on 09/04/2014.

‘Now We Are At The Lower Bound’: Draghi At The Dead-End Of Keynesian Central Banking

Europe is not growing much because most of its economies have been crushed under a mountain of debt, taxes, welfarism and statist dirigisme. Yet somehow the foolish pettifogger running the ECB thinks that driving the cost of money to the ‘lower bound’ (i.e. zero) will help overcome these insuperable – and government made – barriers to prosperity.
Yet in today’s financialized economies, zero cost money has but one use: It gifts speculators with free COGS (cost of goods sold) on their carry trades. Indeed, today’s 10 basis point cut by the ECB is in itself screaming proof that central bankers are lost in a Keynesian dead-end.
You see, Mario, no Frenchman worried about his job is going to buy a new car on credit just because his loan cost drops by a trivial $2 per month, nor will a rounding error improvement in business loan rates cause Italian companies parched for customers to stock up on more inventory or machines. In fact, at the zero bound the only place that today’s rate cut is meaningful is on the London hedge fund’s spread on German bunds yielding 97 bps – -which are now presumably fundable on repo at 10 bps less.

This post was published at David Stockmans Contra Corner on September 4, 2014.

Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Plunge

“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.
Billionaire 1: Sam Zell
On Stocks and reality…
“People have no place else to put their money, and the stock market is getting more than its share. It’s very likely that something has to give here.” “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking,” he said. “If there’s a change in confidence or some international event that changes the dynamics, people could in effect take a different position with reference to the market.”

This post was published at Zero Hedge on 09/03/2014.

“A Printer And A Prayer” – The Three Problems With The Fed “Liquidity Coverage Ratio” Plan

A little over a week ago we wrote that in order to mitigate problems arising from record debt and soaring NPLs, the G-20 had a modest proposal for global banks: more debt. Specifically “in November said leaders will agree “that the world’s top banks must issue special bonds to increase the amount of capital which can be tapped in a crisis instead of calling on taxpayers to come to the rescue, industry and G20 officials said.” In other words, suddenly the $2.8 trillion in Fed injected excess reserves, split roughly equally between US and European banks, are no longer sufficient, and while regulators are on one hand delaying the implementation of Basel III and its tougher capital rules, on the other they are tactically admitting that whatever “generous” capital buffer banks have on their books right now will not be sufficient when the next crisis strikes.”
The proposal for the first time introduced GLACs, or bonds known as “gone concern loss absorption capacity”, seen by regulators as essential to stopping the world’s 29 biggest lenders from being “too big to fail.”
Some of our thoughts at the time: “according to the G-20, instead of having to collapse liabilities to offset that scourge of the New abnormal, namely Non-Performing Loans, banks are hoping to lever up, pun intended, the current scramble for yield and instead beef if up their cash asset, even if it means increasing the liability side of the balance sheet by issuing more debt. Because really all the GLAC do is limit how the banks may use the proceeds from such bond issuance. Then again, these being banks, one can be certain that the moment the GLAC cash is wired in, the funds will be used to ramp risk instead of sitting in a drawer somewhere, awaiting rainy days. Because nobody in a bank is paid for avoiding a crisis, and everyone is paid to generate a return even if it means making the systemic bubble even bigger.”

This post was published at Zero Hedge on 09/03/2014.

Icahn, Soros, Druckenmiller, And Now Zell: The Billionaires Are All Quietly Preparing For The Market Drop

“The stock market is at an all-time, but economic activity is not at an all-time,” explains billionaire investor Sam Zell to CNBC this morning, adding that, “every company that’s missed has missed on the revenue side, which is a reflection that there’s a demand issue; and when you got a demand issue it’s hard to imagine the stock market at an all-time high.” Zell said he is being very cautious adding to stocks and cutting some positions because “I don’t remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people’s thinking.” Zell also discussed his view on Obama’s Fed encouraging disparity and on tax inversions, but concludes, rather ominously, “this is the first time I ever remember where having cash isn’t such a terrible thing.” Zell’s calls should not be shocking following George Soros. Stan Druckenmiller, and Carl Icahn’s warnings that there is trouble ahead.
Billionaire 1: Sam Zell
On Stocks and reality…

This post was published at Zero Hedge on 09/03/2014.

State Treasurers Panic as Big Bank Liquidity Rules Set for Release Today

The continuing perversions and disfigurement of an entire nation’s financial system to accommodate insanely complex mega banks – the same ones who brought the country to the brink of financial collapse six years ago – takes center stage in Washington, D. C. again today.
Because Federal regulators do not want to have egg on their face if one of these global behemoths has to be rescued by taxpayers again, the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency are set to release new liquidity rules today. The rules will redefine the types of liquid assets these giant Wall Street banks must hold to meet the new Basel III Liquidity Coverage Rule set by the international banking body known as the Basel Committee on Banking Supervision, a group made up predominantly of global central banks.
The Federal regulators are expected to adopt rules that put a heavy reliance on banks holding short-term U. S. Treasury securities, one of the most liquid security classes around the world, in order to meet a bank run or credit crunch lasting 30 days.
The state treasurers’ panic over the rule is justified. According to press reports, the Federal regulators may exclude municipal bonds issued by states, counties, cities and school districts from the category ‘high quality liquid assets’ (HQLA) which could be easily liquidated should a mega bank experience a run on its assets. These municipal bonds fund critical projects like roads, schools, and bridges. Given the deteriorating infrastructure of the nation, these new rules may critically impact the economic interests of the U. S. while regulators show growing fealty to the wishes of foreign central banks.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

WHY BURGER KING’S EXPATRIATION IS THE MORAL THING TO DO

It was announced last week that Burger King had bought a famous Canadian restaurant franchise known as Tim Horton’s to reduce the amount of taxes they “owe” to the US government. An upcry arose!
As usual the mainstream media and the people who watch it have the story totally wrong. Burger King is not giving US taxpayers a “raw deal” by looking to move abroad so as to save on profits which are not repatriated. Instead, the iconic fast food burger chain is doing the moral thing by moving its tax-base outside the war-mongering, highly socialist US federal government’s reach.
The mainstream media will never give you this side of the story. This obvious trend towards expatriation terrifies the talking heads. You have to come to alternative media sources like The Dollar Vigilante (TDV) Blog and others to get the truth. As Howard Kurtz writes at Fox News,
I feel confident in saying that most Americans are disgusted by the perfectly legal practice of US companies avoiding taxes by incorporating in another country.
If this is the case, it is because Americans love bombing other countries. They lust for blood. I can think of no other logical explanation Americans would want the machine in Washington to continue being fed. Burger King is not the first company to make the moral decision to leave the US tax farm. Many American companies are going abroad – as many as 70. These so-called “inversions”. Even the most American of investors stand behind the inversion. Iconic American billionaire, Warren Buffet, coughed up $3 billion so the hamburger chain could buy the Canadian donut outfit Tim Hortons. Buffett did this just one month after Obama denounced ‘inversion’ tactics as an ‘unpatriotic tax loophole’, ordering regulatory changes to undermine them.

This post was published at Dollar Vigilante on September 2, 2014.