Cato Institute

"... we seem to have miscalculated..."

Many people have noted that the more insidious or corrupt a law or agency, the more positive sounding its name. The most egregious example during my lifetime, was naming legislation that stripped Americans of most of their civil liberties the “Patriot” Act. In a similar vein, which red-blooded American could ever be opposed to something called the Small Business Administration (SBA). As such, the SBA is the perfect vehicle for cronyism, corruption and corporate welfare, which indeed appears to be its primary reason for existence.

Back in June 2011, Zero Hedge first posted: "Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went" Of course, the conformist, counter-contrarian punditry promptly said this was a non-issue and was purely due to some completely irrelevant micro-arbing of a few basis points in FDIC penalty surcharges, which as we explained extensively over the past 3 years, has nothing at all to do with the actual motive of hoarding Fed reserves by offshore (or onshore) banks, and which has everything to do with accumulating billions in "dry powder" reserves to use for risk-purchasing purposes. Fast, or rather slow, forward to today when none other than the WSJ's Jon Hilsenrath debunks yet another "conspiracy theory" and reveals it as "unconspiracy fact" with "Fed Rate Policies Aid Foreign Banks: Lenders Pocket a Spread by Borrowing Cheaply, Parking Funds at Central Bank"

Ferguson, Missouri:   What’s Really Going On ... And How Did We Get Here?

By now it is well known that Argentina has been declared in default by the major credit rating agencies. However, the default is really a sideshow to Argentina's real problem, which is a profligate government financing its spending increasingly via the printing press, while publishing severely falsified “inflation” data in order to mask this fact. Inflationary policy is and always will be extremely destructive. In the developed world, a situation like that observed in Argentina has so far been avoided, but that doesn't exactly mean that central banks in the industrialized nations are slouches in the money printing department. Their actions buy us what appear to be “good times” by diverting scarce resources into various bubble activities, but in reality they impoverish us.

Let Us Count the Ways ...

• China worries chill markets, copper slumps (Reuters)
• Peak dot com dot two idiocy: Candy Crush Saga maker King seeks $7.56 bln valuation from IPO (BBG)
• Obama Meeting With Yatsenyuk Raises Stakes in Ukraine (BBG)
• Federal prosecutors open criminal probe of GM recall (Reuters)
• Pimco Cuts Government Debt on Outlook for Fed Buying (BBG)
• Missing Malaysian Jetliner Confuses World That’s Online 24/7 (BBG)
• Mortgage Giants Face Endgame (WSJ)
• Russia Calls U.S. Aid to Ukraine Illegal Amid Standoff (BBG)
• U.S. judge freezes assets of Mt. Gox bitcoin exchange boss (Reuters)
• Ousted Libyan PM flees country after tanker escapes rebel-held port (Reuters)
• Senate-CIA Dispute Erupts Into a Public Brawl (WSJ)

As 11.3 million Americans spend more than half their income on rent, a record increase of 28% in four years, increasingly more are faced with the core "New normal recovery" choice: “We either eat, or we pay rent.”  Welcome to the Blackstone recovery...

"It's going to put my family and me out on the streets," is a perspective shared by many of the 1.3 million Americans about to lose their emergency unemployment claims. The program, started during the recession, was intended to help jobless people after they exhausted state benefits, typically lasting six months. House Republicans resisted continuing the benefits without budget cuts elsewhere to cover the cost. As Bloomberg reports, opponents say the extended benefits discourage the unemployed from accepting jobs and that the program should be curtailed, given the recovery in the nation’s labor market.This has profound implications for the oh-so-important unemployment rate that  the Fed is so dependent upon...

The spin does not get any better than this... As they reported they would,

• *LEW SAYS U.S. SOLD ALL REMAINING SHARES OF GENERAL MOTORS RECOUPING $39 BLN OF ORIGINAL GM INVESTMENT

That is a $10.5 Billion loss! But, The Center for Automotive Research, a Michigan nonprofit organization that analyzes auto industry issues, those funds “saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections -- or 768% of the net investment.” We can't wait to hear how much Bill Ackman made or saved on his Herbalife investment...

It seems getting an 8 pm "escape" from friends and family this Thanksgiving to rush into the nearby World Wrestling Federation Walmart may have been a welcome reprieve for some. Those some in question being NSA agents, and just in case their friends and family got a little too pesky, boisterous or simply inquisitive, all the employees of the National Security Agency and the Central Security Services received a prepared memo with preauthorized talking points designed to "guide" conversations over the Thanksgiving dinner table. Plastered at the head of the 2-page propaganda is a Douglas Adams-like (or was that Isaac Asimov) in its simplicity bullet point: "(1) NSA's mission is of great value to the Nation." How was it that "defenders" of the fatherland during the Third Reich were being brainwashed again? But we digress.

Recent surveys and research studies by sources from the UN to streetRx.com put the size of the illegal drug market in the U.S. at anywhere from $200 to $750 billion. The market is notoriously hard to track by design, and it is constantly evolving as prices and usage fluctuates; but as ConvergEx's Nick Colas notes, there’s a plethora of data on the topic: formal surveys by the CDC and user-submitted blog posted on websites like Hightimes.com trace price, usage, and traffic stats for marijuana, powder and crack cocaine, d-methamphetamine, and heroin. Legalized dispensaries now allow us to estimate potential tax revenue from marijuana sales, while incarceration rates for drug offenders reveal the economic impact of the illegal drug trade. In short, while the illegal drug market might be hard to track – if only by virtue of its illegality – Colas points out that we can learn a lot about its size and scope by aggregating these formal and informal data. Most surprising of them all: illicit drug use is no longer the realm of just the youth.

Debunking Government’s Justification for Mass Surveillance

Mass Surveillance Destroys Innovation, Trust, the U.S. Internet Market and Other Foundations of Prosperity

The end. The dollar collapsing into zero interest is like a spacecraft crashing into a black hole. The singularity's pull is irresistable.