Barack Obama

Over the course of decades we have allowed ourselves to be corrupted by the love of material possessions, the lure of a debt based faux wealth, the money for nothing entitlement promises of dishonorable politicians, the evil of currency debasement, the effectiveness of mass media propaganda, and the belief that we could sacrifice freedom and liberty for promises of safety and security made by a cabal of powerful rich men. Power has been concentrated into the hands of the few, who operate in secrecy and despise the people. They don’t want transparency or open debate. Freedom of speech is nothing but a thorn in their side. They believe they are smarter than the serfs and have no morality when it comes to committing illegal acts and disregarding the Constitution. They are not acting in the public interest. Their abuse of power and looting of the national wealth have put us on a path towards a bloody revolution. This is not a time for conformity, obedience or submission. It’s time to stand up and expose the evil doers. It’s time to rally around those who care about this country. Who are the real traitors? You know the answer.

• China cash crunch deepens as PBOC withholds funding (FT), just a week behind ZH
• Platts in hot manipulated crude again: Traders Try to Game Platts Oil-Price Benchmarks (WSJ)
• Kabul Suspends Security Talks With U.S., jeopardizing plans to maintain a U.S. military presence (WSJ)
• Afghan government irked over U.S. talks with Taliban (Reuters)
• BOJ Kuroda: BOJ to Adjust Policy If Japan Econ Changes (MNI)
• Google Considering Private-Equity Alliances (BBG)
• Korean Air Buying 747-8s to End Boeing’s Sales Drought (BBG)
• Syria's Islamists seize control as moderates dither (Reuters)
• SEC considers policy shift on admissions of wrongdoing (FT)
• U.K. Banker Bonuses Face Decade Delays in Industry Overhaul (BBG)

NSA Grasps at Straws

As noted yesterday, and perhspa even more prescient now Anastasiades is back with the begging bowl, the debt crisis in Cyprus and the subsequent "bail-in" confiscation of bank depositors' money matter for two reasons: 1. The banking/debt crisis in Cyprus shares many characteristics with other banking/debt crises. 2. The official Eurozone resolution of the crisis may provide a template for future resolutions of other banking/debt crises. It also matters for another reason: not only is the bail-in a direct theft of depositors' money, the entire bailout is essentially a wholesale theft of national assets. This is the inevitable result of political Elites swearing allegiance to the European Monetary Union.

President Barack Obama stated yesterday that Federal Reserve Chairman Ben Bernanke has stayed in his position “longer than he [Bernanke] wanted”. Some will be probably agreeing with Bernanke (and Obama) more than he might have expected after having said that. Although he should have stopped short of adding (for fear of hurting Helicopter Ben’s feelings?) that he has done an “outstanding job”.

• Obama Says Bernanke Fed Term Lasting ‘Longer Than He Wanted’ (Bloomberg)
• Merkel Critical Of Japan's Credit Policy In Meeting With Abe (Nikkei)
• China Wrestles With Banks' Pleas for Cash (WSJ)
• Biggest protests in 20 years sweep Brazil (Brazil)
• Pena Nieto Confident 75-Year Pemex Oil Monopoly to End This Year (Bloomberg)
• G8 leaders seek common ground on tax (FT)
• Putin faces isolation over Syria as G8 ratchets up pressure (Reuters)
• Former Trader Is Charged in U.K. Libor Probe (WSJ) - yup: it was all one 33 year old trader's fault
• Draghi Says ECB Has ‘Open Mind’ on Non-Standard Measures (BBG)
• Loeb Raises His Sony Stake, Drive for Entertainment IPO (WSJ)

Eventually the money runs out.  Much of America was shocked when the city of Detroit defaulted on a $39.7 million debt payment and announced that it was suspending payments on $2.5 billion of unsecured deb.  Anyone with half a brain and a calculator could see this coming from a mile away.  But people kept foolishly lending money to the city of Detroit, and now many of them are going to get hit really hard. But what Detroit is facing is not really that unique.  In fact, Detroit is a perfect example of what the future of America is going to look like.  We live in a nation that is rotting, decaying, drowning in debt and racing toward insolvency. Just like Detroit, a day is rapidly approaching when America will not be able to kick the can down the road anymore. Sadly, our politicians don't seem inclined to do anything about it and most of the population seems to think that our exploding national debt is not a significant problem. By the time it becomes clear how wrong they were, it will be far too late to do anything about it.

First it was the "most important" payroll print in years, then the "most important" retail sales number, and now we are just days ahead of the "most important" FOMC statement in years as well, as the fate of the centrally-planned markets lies in the hands of Bernanke's decision to taper, or not to taper. The main catalyst for now still appears to be an ongoing wrong interpretation of Hilsenrath's Thursday blog post in which some still see reaffirmation by the Fed that it won't taper, when all the Fed's mouthpiece said is that the short-end would be anchored even as the long-end is allowed to rise. Looking at the well-known no volume levitation futures action, which in the overnight session has wiped out all of Friday's losses and then some simply due to a 2.73% rise in the Nikkei overnight back above 13,000 driven by the USDJPY briefly regaining 95.00, the market has made up its mind (if only for the time being) that whatever decision the Fed takes regarding the monthly level of liquidity injection is a bullish one. At least until it changes its mind next.

If Obamacare's stated goal was to broaden the health insurance market, give more options to consumers, and generally lower the cost of health insurance, courtesy of the IRS' flawless execution of yet another unprecedented government expansion, it may be in for a tough time. Because while on paper every statist plan of centrally-planned ambitions looks good, in reality things usually don't work out quite as expected. Case in point the news that Aetna will stop selling health insurance to individual consumers in California at the end of 2013, in advance of Obamacare's complete transformation of the insurance market: a transformation which just incidentally may see most private health insurance firms follow in Aetna's steps and the emergence of a single-payer system along the lines of the British National Health Service. A government-mandated and funded system which, needless to say, crushes private enterprise, and ends up costing far more for all involved than an efficient market based on individual wants, needs and capabilities constantly in flux. But that's ok - there is an administration which is smarter than the entire market, and a Federal Reserve which will monetize any deficit funding, and the only trade off is making the already ridiculous US federal debt ridiculouser.

Americans who disapprove of the government reading their emails have more to worry about from a different and larger NSA effort. As the AP reports, the program, that snatches data as it passes through the fiber optic cables that make up the Internet's backbone, which has apparently been known for years, copies Internet traffic as it enters and leaves the United States, then routes it to the NSA for analysis. As the name suggests, Prism is merely the intelligent filter, finding discrete, manageable strands of information within this much more massive data stream that is being collected and stored. Prism makes sense of the cacophony of the Internet's raw feed. What is unclear, as more details, interviews and documents become available, is how Prism fits into a larger U.S. wiretapping program in place for years (know as 'Hoovering' at one major internet company). In the meantime, as one former NSA official noted, "You have to assume everything is being collected."

Well, isn't that convenient?  At the moment when the Obama administration is feeling more heat then ever before, it starts another war.  Suddenly everyone in the mainstream media is talking all about Syria and not about the IRS scandal, Benghazi, NSA snooping or any of the other political scandals that have popped up in recent weeks. As if on cue, Obama made headlines all over the globe on Thursday by claiming that the Syrian government has used chemical weapons against the rebels "multiple times", and that the U.S. was now ready to do more to assist the rebels. As far as the Obama administration is concerned, there is no such thing as a coincidence.  The timing of this announcement regarding Syria was not an accident.

Several days ago, in the damage control aftermath of Snowden's NSA espionage conspiracy fact confirmation, Barack Obama took to the TV pulpit where he appealed to the nation, as he always does in times of strife, explaining that one can't have 100% security and 100% privacy. He said some other things, all of which as usual wrapped in rhetorical brilliance, if holding little of pragmatic and realistic value. So who better the debate the president's attempts at damage control than the vice president himself. Here, for your viewing pleasure, is Joe Biden, circa 2013 debating Barack Obama, circa 2013.

"Information about the usage of chemical weapons by Assad is fabricated in the same way as the lie about Hussein's weapons of mass destruction.” Alexei Pushkov, head of the Russian lower house of parliament’s international affairs committee, said on Twitter.

• As Goldman's money-printing tentacle Carney arrives, everyone else leaves: Tucker to Leave BOE (WSJ)
• So much for pent up demand: Refinancings Plunge as Bond Yields Rise (WSJ)
• Singapore Censures 20 Banks for Attempts to Rig Benchmark Rates (BBG)
• Behind the Big Profits: A Research Tax Break (WSJ)
• While working for spies, Snowden was secretly prolific online (Reuters)
• Turkey to Await Ruling on Park as Erdogan Meets Protesters (BBG)
• Iran votes for new president, Khamenei slams U.S. doubts (Reuters)
• NSA revelations, modified wheat cast a pall on U.S. trade talks with Europe (WaPo)
• Euro zone inflation subdued as employment keeps falling (Reuters)

Establishment politicians from both major political parties are rushing to defend the NSA and condemn whistleblower Edward Snowden.  They are attempting to portray Edward Snowden as a "traitor" and the spooks over at the NSA that are snooping on all of us as "heroes".  In fact, many of the exact same politicians that once railed against government spying during the Bush years are now staunchly defending it now that Obama is in the White House. But it isn't just Democrats that are acting shamefully.  Large numbers of Republican politicians that love to give speeches about "freedom" and "liberty" are attempting to eviscerate the Fourth Amendment to the U.S. Constitution.  The government is not supposed to invade our privacy and investigate us unless there is probable cause to do so. Apparently many of our politicians misunderstood when they read the novel 1984 by George Orwell.  It wasn't supposed to be an instruction manual.