Federal Reserve survey: Obamacare is hurting the economy

Earlier this month both the New York and Philadelphia Federal Reserves published the results of a survey they conducted asking business owners how the Affordable Care Act has changed how they operate.
Bear in mind, healthcare reform was sold on the basis that it would be good for the American people and good for the US economy.
Their economic reasoning was that the amount of money currently being spent on medical care in the US would be reduced. And that spending would shift to more productive areas of the economy.
But then, earlier this year, it turned out that the exact opposite happened.
Healthcare spending as a proportion of GDP had actually gone UP rather than down after the introduction of Obamacare.
So then the government flipped the message around. Suddenly the healthcare spending increase wasn’t a sign of failure, it was a sign of success!
That extra 0.1% of GDP that came from increased government spending in the last quarter of 2013 was all that kept the US from slumping back in to recession. Thus, Obamacare had saved the economy!
Now the Fed is chiming in with its own data showing that, in general, Obamacare has had a negative impact on the labor market.

This post was published at Sovereign Man on September 30, 2014.

RX For Revisionist Bunkum: A Lehman Bailout Wouldn’t Have Saved The Economy

Here come the revisionists with new malarkey about the 2008 financial crisis. No less august a forum than the New York Times today carries a front page piece by journeyman financial reporter James Stewart suggesting that Lehman Brothers was solvent; could and should have been bailed out; and that the entire trauma of the financial crisis and Great Recession might have been avoided or substantially mitigated:
What happened that September was the culmination of circumstances reaching back years – of ordinary people too eager to borrow, of banks too eager to lend and of Wall Street financial engineers reaping multimillion-dollar bonuses. Even so, saving Lehman from complete collapse might have shielded the economy from what turned out to be a crippling blow.
That is not just meretricious nonsense; its a measure of how thoroughly corrupted public discourse about the fundamental financial and economic realities of the present era has become owing to the cult of central banking. For crying out loud, yes, there would have been a Great Recession – even had Lehman been pawned off to Barclays with a taxpayer guarantee or if it had been bailed-out in some other manner.
In fact, the Barclay’s logo did end up on Lehman’s 7th Avenue glass tower shortly after the September 15th screen shot below. Yet the decision to allow Lehman’s stock and bondholders to take a severe haircut first did not cause the thundering collapse of the housing and credit markets, nor the loss of the artificially bloated level of consumption spending, jobs and income that had accompanied the giant financial bubble that finally burst in September 2008.

This post was published at David Stockmans Contra Corner on September 30, 2014.

Central Economic Planning Will Get Better, Promise!

The Good and the Bad Bloomberg, which is a major purveyor not only of useful economic and financial data, but also a major proponent of economic central planning as practiced by modern central banks, informs us that Fed chair Janet Yellen has actually found the holy grail. Finally, central planning will work! At last, the promise of the ‘scientific monetary policy’ is about to be fulfilled. Nirvana has practically arrived.
In a once again slightly confusing Bloomberg headline we are told: ‘Yellen Takes the Good Greenspan, Leaves the Bad’. If that’s so, obviously nothing can go wrong. It does make us wonder though what she’ll do about the ugly Greenspan.

In a way, this is an almost prophetic poster, with its references to risk taking and someone ‘doing the cutting’…
So what is the promising secret sauce discovered by Ms. Yellen? After a string of abysmal failures over the past century, how is central economic planning by the Fed finally going to lead us to salvation? As the headline already indicates, tweaking Alan Greenspan’s playbook is believed to do the trick:

This post was published at Acting-Man on September 30, 2014.

Recovery? 60% Of Greeks Live At Or Below Poverty Levels

While Greek government yields (and political leaders) proclaim the troubled peripheral European nation is ‘recovering’, the risk of major political upheaval in Greece has not gone away ahead of next year’s presidential vote next year. As Reuters notes, under growing pressure from anti-bailout leftists, Greek Prime Minister Antonis Samaras desperately needs a new narrative to get the backing of lawmakers and rally Greeks fed up with four years of austerity. We wish him luck as Keep Talking Greece notes, it is high time that the real data of the economic situation of the Greek society come to the surface and so it did this week. A report from Greece’s State Budget Office found that three in every five Greeks, or some 6.3 million people, were living in poverty or under the threat of poverty in 2013 due to material deprivation and unemployment.

This post was published at Zero Hedge on 09/30/2014.

Government Worker Claims increase 30% since 2009 in LA

Pensions are the great problem and how government workers exploit loopholes to get even more is starting to come to light around the world. In New Zealand, years ago they created a program that is a woman got pregnant and did not know who the father of the child was, the state provided everything even a free home. Needless to say, they ended up with the highest per capita of women who had no idea who was the father of their child.
The LA Times shows that the loopholes being exploited by police and firefighters in LA has increased more than 30% from 2009 to 2013 based on claims of any injury while on the job. In all, L. A. police and firefighters on injury leave collected $197 million in salary from 2009 through 2013 while the taxpayers had to then spent an additional $131 million on their medical care, disability payments and related expenses. This is a nationwide trend and it is bankrupting many municipal governments

This post was published at Armstrong Economics on September 30, 2014.

Is The U.S. Government Meddling In The Hong Kong Protests? – Episode 480

The following video was published by X22Report on Sep 30, 2014
Europe’s youth unemployment hits 23.3%. UK consumer confidence falls. Eurostat fabricates inflation numbers. Housing prices are falling and it is accelerating across the U. S. according to Case-Shiller. Obama is trying to convince everyone that they are better off even though they don’t feel it. Singapore is becoming a global gold hub. Government will forgive student loans if you work for the government. Illegals will now be receiving student loans. The Hong Kong protests are being staged by the central bankers. They are using Joshua Wong who has ties to the US. FBI warns that the Islamic State could use cyber attacks to retaliate against west.

Investors Are Too Comfortable In The Fed’s Win-Win Conditions For Taking Risk

For a long time, Fed printing via balance sheet expansion has been the key to understanding markets and the predominant driver that has trumped all other matters. Investors have been able to ignore significant global events, tensions, and economic conditions in faraway places, because a lower real and perceived risk premium from implicit Fed promises was the single most important aspect driving asset prices higher. This game is quickly coming to an end.
As the Fed’s asset purchase program ends next month, global events and global economic fundamentals will have to be taken into account and priced accordingly. Investors have become too comfortable and entrenched with the idea that Fed policy provided a win-win condition for taking risk; whereby, weak economic data meant more Fed printing, while strong data meant better fundamentals coupled with a Fed that would (still) only respond slowly and gradually. This cozy arrangement is ending and investors have not yet adequately recalibrated.
Furthermore, at 80:1 leverage, the Fed’s balance sheet is probably close to its practical limit. It stood around 20:1 pre-2008. As it currently stands, should the Republicans take the Senate during the mid-term election in November, criticisms will mount, potentially leading to a major restructuring of the institution.

This post was published at Zero Hedge on 09/30/2014.

sept 30/Another loss of 2.39 tonnes of gold at the GLD/no change in silver at SLV/another big hit on silver and gold today/

Gold closed down $7.00 at $1210.50 (comex to comex closing time ). Silver was down 52 cents at $17.00
In the access market tonight at 5:15 pm
gold: $1208.00
silver: $16.97
GLD : we lost 2.39 tonnes of gold inventory at the GLD (inventory now at 769.86 tonnes)
SLV : as of 6 pm est no change in silver inventory at the SLV. It looks like the bankers cannot raid the SLV for physical silver because there is none…just paper silver (inventory now 346.011 million oz)
We will discuss these and other stories
So without further ado………………
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved slightly towards the positive needle. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates
London good delivery bars are still quite scarce.
Sept 30 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
.1275000% .12750000% .1300% .147500% .2175000%
Sept 29 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
1200% .1233000% .13000% .1366700% .2233300%
Let us now head over to the comex and assess trading over there today,

This post was published at Harvey Organ on September 30, 2014.

Caught On Tape: HFT Algo Manipulating GOOGL 1000 Times Per Second

It is very common to find examples of stock quotes changing rapidly – hundreds and sometimes thousands of times per second in a single stock. At the extreme, we’ve seen in excess of 25,000 quote changes in a single stock in one second of time or less (this page has a chart that documents every extreme example). Often there are no trades during these events. Sometimes a simple pattern evolves from the quote price changes, such as in the case of a certain High Frequency Trading (HFT) algorithm that we’ve recently seen run every day in Google stock.
This particular algorithm starts with a bid (or offer) several dollars away from the bids (offers) from one of the other 10 exchanges trading Google Class A stock (symbol GOOGL). We’ve also seen this algo running in other higher priced stocks. The algo in this example only appears to run from the Nasdaq-Boston (BOST) exchange. In the chart below, we show bids and offers color coded by reporting exchange (there are 10 exchanges in GOOGL). Note that these are “top of book” quotes – that is, they are the highest bid price and lowest ask price from that exchange. The best top-of-book bid and ask become the National Best Bid/Offer (NBBO) and is shown as light gray shading in these charts. Note, this algo only affects the NBBO when it gets near the end of its price stepping loop.

This post was published at Zero Hedge on 09/30/2014.

EU To Aggressively Increase Tax Collection

The Social Democrats in Europe demand that the office of the new EU Commissioner place the collection of taxes very high on the agenda. All governments are going broke and this is the DEFLATIONARY side the hyperinflationists never acknowledge. Those in government only view their crisis through tax evasion and avoidance and exaggerate everything. The are claiming that tax revenue that has escaped within the Member States has reach 2 trillion euros. They do not look beyond the current crisis. They cannot see that their spending increases perpetually and without reform the system collapsed into dust. This is how revolutions erupt. You cannot keep pushing people to the point of economic extinction. This is not the big capital – this is the average person. When you impact the masses, they do rise up as we saw in Ukraine.
Superficially, the EU government will also be targeting US corporations in part which is retaliation for US treatment of European banks with huge fines. The Socialists want to take all citizens under greater scrutiny to ensure more efficient tax collection in Europe. Of course, there is never any discussion of an economical use of taxpayers’ money at the SPD. Governments only see their own needs at the expense of the people.

This post was published at Armstrong Economics on September 30, 2014.

More Lies: Watchdog Finds Government “Greatly Exaggerated” Success In Funding Small Businesses Last Year

New investigations by the Small Business Administration (SBA) Office of Inspector General have found SBA Administrator Maria Contreras-Sweet’s announcement that small businesses received 23.39% of all federal contracts was greatly exaggerated. As WaPo reports, Federal agencies overstated their success last year in contracting with small businesses that face socio-economic disadvantages finding $400 million worth of contracts that agencies gave to ineligible firms but still counted toward their targets. Rather stunningly, the report found of the top 100 recipients of the highest dollar amount of federal small business contracts, over 75% were actually current large businesses. Trust…

This post was published at Zero Hedge on 09/30/2014.

Junk Bond Bubble Cracks, Destroys Stocks One at a Time

General Cable (BGC), a copper, aluminum, and fiber-optic cable and wire maker with $6.2 billion in revenues, made an announcement on Monday that caused its already beaten-down stock to drop another 6.5%: it withdrew its offering of $250 million in senior unsecured junk-rated notes.
Due to ‘uncertain and weak overall conditions in the high yield debt market,’ thestatement said. Issuing the debt now ‘would not be in the best interest of shareholders under terms currently available,’ CEO Gregory B. Kenny explained.
Junk-bond default rates have been very low; as long as old debt can be replaced easily and more cheaply with new debt, and as long as new losses and negative cash flows can be funded with new debt, default isn’t necessary. Investors cling to this notion by their fingernails to rationalize the record low yields they’re accepting.
It’s a self-propagating cycle: new money chases yield and finds it in junk, and it allows companies to avoid the hard truth as everything gets funded, and default rates drop, which brings in even cheaper money to replace old wobbly debt and fill operating sinkholes, and risks disappear from the equation since new money can always keep a company afloat.
Which is precisely what General Cable proclaimed on September 22 when it announced the debt deal: it would use the proceeds ‘to address the maturity of the 2015 floating rate notes and prefund the restructuring program.’ So pay off old debt and fund new losses.

This post was published at Wolf Street on September 30, 2014.

The Stock Market Crash Risk Calendar for October 2014

The silence I have been projecting lately via the written word has been far surpassed if one has taken the time to listen to my recent radio programs via JMR. Over the last three weeks, I have outlined the threats not just to the stock markets but to the United States economy as a whole and defined why the risk is as great now as it was in 1987 when a series of unrelated events led to a finale with a Federal Reserve policy mistake which injected a variable the destroyed the perceived safety of portfolio insurance which was all the rage at that time (that’s ‘derivatives’ in 1980’s terms).
The news over the last few days and weks has been of drastic importance to our economy and markets:

This post was published at John Galt Fla on September 30, 2014.

Australian Scientists Caught Rigging Climate Number to Fake Global Warming

In Australia, the scientists have been caught red-handed adjusting the number to pretend the climate has been getting warmer. Let’s get real here. There are natural cycles within climate. How did the Ice Ages end before without cars? Guess it must have been a lot of cows farting as Europe has declare cows posed the second greatest threat to the environment next to cars. Keep one thing in mind. Creating a climate crisis means they get funding. The money flows to them for investigating what does not exist.

This post was published at Armstrong Economics on September 30, 2014.

What Just Happened In Today’s “Crazy” And Biggest Ever “Window-Dressing” Reverse Repo?

Back in the day, when the sophisticated deep thinkers who effuse deep economic thought, were deeply contemplating whether the Fed’s IOER was a better tool to assist if and when (hint: never) the Fed begins to hike rates, or whether the relatively new (conceived about a year ago) Reverse Repo was the better candidate to help push liquidity out of America’s bloated financial institutions, we made it very clear that the entire debate is completely irrelevant, as the only purpose of the Reverse Repo was to assist banks in pretending (with the Fed’s explicit knowledge) that they have a better balance sheet than they represent.
We did this first in January in “Window Dressing On, Window Dressing Off… Amounting To $140 Billion In Two Days”, then in April in “Month-End Window Dressing Sends Fed Reverse Repo Usage To $208 Billion: Second Highest Ever“, then in June “WTF Chart Of The Day: “Holy $340 Billion In Quarter-End Window Dressing, Batman“, then in July “Record $189 Billion Injected Into Market From “Window Dressing” Reverse Repo Unwind.”
Of course, the abovementioned deep thinkers ignored this because it would mean that all the argumentation about the Reverse Repo facility as a means to assist the rate hiking cycle was irrelevant, and that instead of hiking rates the Fed was far more concerned with the collateral shortage that the TBAC loudly complained about in the summer of 2013… just months before the RRP was unleashed (recall “Desperately Seeking $11.2 Trillion In Collateral“). Pure coincidence, right?

This post was published at Zero Hedge on 09/30/2014.

Small Caps Suffer Worst Quarter In 3 Years; Bonds Leading Year-To-Date

Despite the ubiquitous v-shaped recovery in stocks from the US open to EU close (decoupling entirely from bonds), stocks slumped into the end of the quarter leaving the S&P and Dow barely positive for Q3 andRussell 2000 down 7.9% – its worst quarter since Q2 2011 (and -5.2% year-to-date). Treasury yields flip-flopped around in a 4-5bps range with a late-day ramp (suggesting liquidations cough PIMCO cough) leaving 30Y -1bps on the week. The USDollar suged higher in the European session and traded lower in the US session. The bigger news on the day was the carnage in commodities that appeared to occur around the European close (desk chatter of commodity fund liquidations). Silver and WTI Crude were monkey-hammered, gold and copper dropped to down 1% on the week. VIX pumped and dumped again but closed above 16. Stocks closed very weak with Russell tumbling 1.5% on the day tonot “off the lows.”

This post was published at Zero Hedge on 09/30/2014.

Spanish Court Denies Spanish Right to Vote

Spain’s constitutional court has decided to suspend Catalonia’s referendum on independence following a request from the Spanish Prime Minister Mariano Rajoy. This ruthless undemocratic pretend leader jumps whatever height the EU Commission tells him to do betraying his own country to the rising dictatorship of Brussels.
As reported, a court spokeswoman stated that the 12 judges reached the decision to suspend Catalonia’s November independence referendum after an hour-long emergency meeting. They too are a total disgrace to the very idea of democracy and the West should just stop the pretense that they are any different from Russia. Power devolves to dictatorship whenever there are no checks and balances. This is a simple truth of history without exceptions.

This post was published at Armstrong Economics on September 30, 2014.

Rick Santelli Slams Central Bank Intervention For “Taking The Voters Out Of The Game”

“Central Bankers have moved from being ‘nudgers’ on monetary policy to basically managing fiscal policy,” warns Rick Santelli, adding that “in the West, it’s now basically the same.” As Santelli points out so accurately, the central bankers have admitted as such, noting “they have to dabble in that direction because nothing can get done in ‘politics’” in the US or Europe “for the people – the voters.” What this has done, Santelli chides calmly is “take the voters out of the game.” Simply put, he blasts, “if central banks hadn’t had such a large foray into politics, politicians would have had to sink or swim on the merit – or lack therein – of their policies… that weren’t creating the growth.” He concludes ominously that the ‘spread’ between central-bank-inspired “stability” and real-world fiscal-policy-inspired “growth” has never been wider.

This post was published at Zero Hedge on 09/30/2014.

Everything You Need to Know About the S&P Until Christmas

When I need to clear my mind, I put on my beat-up Saucony sneakers and drive to nearby Deer Lake Park in Burnaby, British Columbia. After a couple of miles, though, as my body gets into a rhythm, my mind wanders back to the thought that occupy it for hours each day: where will this market go next?
And I’ve thought a lot about what went on this summer. Since June 1:
‘S&P 500 is up 2.7%, having set a new record high in September;
‘MSCI World index is down 0.5%;
’10-year Treasury yield is down from 2.54% to 2.50%;
‘Brent Crude 0il is down 12.8%; and”Gold is down 2.2%.
The Bureau of Economic Analysis reported that the US economy expanded by 4.6% year on year in the second quarter, up sharply from the first quarter’s disappointing 2.1% annual decline. Consensus estimates for annual GDP growth in the third and fourth quarters of this year are about 3%.
The stage seems to be set for the fifth straight year of positive economic growth in the US; however, we’re always cautious about government-supplied information, especially during an election cycle.
At the moment, macro developments seem closely intertwined with stock market performance. Instead of slumping, the market was rather vibrant this summer. The S&P 500 showed resilience, reaching higher highs after a dip in late July and early August that coincided with increased uncertainty surrounding the Ukrainian crisis.
Geopolitics aside, the market was supported by GDP growth, which in turn was underpinned by strong corporate profits and margins. In fact, in the second quarter, the S&P 500 set a new record for profit margins: 9.1%. So much for ‘sell in May and go away.’

This post was published at The Burning Platform on September 30th, 2014.

Treasury Curve Roundtrips To Flattest Since S&P’s “666” Intraday Lows

You all remember March 6th, 2009, right? Some days are easier to remember than others and March 6th, 2009 will not easily be forgotten as that was the day when the S&P 500 made its now infamous “666” intraday low and it also marked the closing price low of 683 for the S&P 500 during the financial crisis. Seems like a very long-time ago as the S&P 500 is roughly 1300 points higher than the intraday financial crisis low.
Interestingly, as of the close yesterday, the spread between the 10-year treasury and the 30-year treasury fell to its lowest level (69 bps) since that infamous day.

This post was published at Zero Hedge on 09/30/2014.