Florida

MERS: The Center of the Mortgage Scam

Now is the time to think about how you would live your life if your real value was appreciated and fairly compensated.

Given the increasing weight of taxation on the middle- and upper-incomes in this country and the first step towards savings 'wealth' taxation, it is perhaps no surprise that the nation's employers have decided enough is enough with another implicit tax - healthcare. As the WSJ reports, cost-conscious companies (such as spare tire manufacturer Michelin North America) are passing on the additional costs of healthcare to their obese workers. Are you a man with a waist measuring 40 inches or more? Have high blood pressure? Starting next year, your unhealthiness will cost you. Incentivizing 'healthiness' via credits is increasingly shifting to penalizing unhealthiness as six in ten employers are set to enforce a 'fat tax' in the next few years. The inability to grow top-lines and need to cut costs amid the uncertainty surrounding the surging corporate healthcare costs resulting from Obamacare means employers' balance of carrot and stick seems to be tilting increasingly to the stick. So the people got their pro-equality Obamacare but if you are an 80/20 risk factor - you will be less equal than others.

With the mainstream media becoming increasingly worked up about the pending real-estate 'parabolic' surge and 'now is the time to buy', the reality of 'zombie foreclosures' and 'foreclosure stuffing' that we discussed six months ago continues to grow. While most prefer to ignore inventory as an issue (apart from Bob Shiller and Karl Case who have adamantly refused to 'bless' this 'exuberant' housing recovery), knowing full well that at some point these huge volumes of vacated but still 'owned' homes must come to market (once the foreclosure process picks up). The reality is that with Nevada, Kentucky, Maine, and Indiana having over 50% of homes in vacant foreclosure, there is plenty of supply to come (and with it the accompanying downward pressure on prices)...

For the last year or so, Mario Draghi (the omnipotent head of the ECB) has discussed 'market fragmentation' as a major concern. The reason is clear - his easy money policies are entirely ineffectual in a monetary union when his actions do not 'leak' out to the real economy. Nowhere is this fragmentation more obvious than in the inexorable rise in peripheral lending rates (to small business) compared to the drop (over the last 18 months) in the core. Simply put, whether it is demand (balance sheet recessionary debt minimization) or supply (banks hoarding for safety), whatever the punch ladeled from the ECB's bowl, it is not helping the most needy economies. Of course, that was never really the point anyway - as we have pointed out many times; the actions of the ECB are (just as with the Fed) to enable the banking system to live long enough to somehow emerge from the black hole of loan losses and portfolio destruction that they heaped upon themselves. This chart is yet another example of proof that monetary policy is entirely ineffectual in the new normal - and yet the central planners push for moar...

"The Order finds that the Respondents’ customers thus never owned, possessed, or received title to the physical commodities that they believed they purchased."

• Cyprus works on Plan B to stave off bankruptcy (AP)
• Cyprus seeks Russian bailout aid, EU threatens cutoff (Reuters)
• Freddie Mac Sues Multiple Banks Over Libor Manipulation (BBG)
• Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg)
• Italian president seeks way out of political stalemate (Reuters)
• Chinese factories struggle to keep staff (FT)
• South Korean banks, media report network crash (CBC)
• BlackBerry Inventor Starts Fund to Make Star Trek Device Reality (Bloomberg)
• Osborne Should Be Fired, Voters Say in Pre-Budget Poll (Bloomberg)
• Obama Begins First Visit to Israel as President (WSJ)
• Anadarko finds ‘potentially giant’ oilfield (FT)
• Britain's Osborne boxed in by austerity on budget day (Reuters)
• MF Global reaches agreement with JPMorgan (FT)

If any person is too big to prosecute then your justice system is a sham, a lie, a farce, a joke, a bastardization of all that America used to stand for.

The 9/11 Commission Report Has Crumbled Like a Ponzi Scheme  ...

While "this time may be different" for the centrally-planned stock market, every historic example of subsequent ruin notwithstanding, the very recent past is again hitting Carnival Cruise Lines with a vengeance, as one short month after its disabled Triump cruise ship fiasco, in which passengers were trapped on board a filthy ship for five days, the cruise company is forced to suffer through a very humiliating case of deja vu. Reuters reports, "A Carnival Cruise Lines ship was stuck at port in St. Maarten in the Caribbean on Thursday with equipment trouble, a month after another Carnival vessel was disabled in the Gulf of Mexico by a fire, trapping thousands of passengers for nearly five days. The captain of the Carnival Dream reported a problem with the emergency diesel generator, which controls the ship's propulsion, a U.S. Coast Guard spokesman said.  "Right now the passengers are being kept on board the ship for accountability reasons," Doss said. "They were scheduled to leave today so the captain has decided to have everybody remain on board at this time. CNN reported that passengers aboard the Carnival Dream had contacted the cable news channel complaining of power outages and overflowing toilets, tales reminiscent of the troubles on the Carnival Triumph." And to think the passengers could have just stayed home, opened their E-trade accounts, BTFD, and basked in the glow of the wealth effect, knowing full well at the current rate of Fed liquidity injections they could all soon afford their own private island.

The grind lower in initial jobless claims continues, which from an upwardly revised 342k (was 340K) last week, declined to 332K in the most recent week ended March 9, on expectations of an increase to 350K. This was the third consecutive beat in a row and the lowest total print since January, which in turn takes it all the way back to January 2008. Continuing claims were also better than expected, dropping from an upwardly-revised 3113K, to 3024K, on expectations of a 3090K print. According to the BLS, unlike the last time we had an abnormally low print, no states were estimated this time around.

The Biggest Welfare Queens of All ...

Departing a socialist regime to avoid paying taxes is not just a French thing anymore: Bloomberg reports that one of the most famous hedge fund managers of the late 2000s, if not so much recently, John "Boricua" Paulson "is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5 billion he has invested in his own hedge funds, according to four people who have spoken to him about a possible relocation." In moving to Puerto Rico, Paulson would merely be the latest person to avoid paying any taxes associated with Paulson & Company: virtually every other investor in Paulson's hedge funds also has no taxes to worry about, for a far simpler reason: taxes are generally incurred on profits, not three years in a row of relentless losses.

When a group or organization seeks to establish any social policy, it helps tremendously if that group remains honest in their endeavor. If its members are forced to lie, tell half-truths or use manipulative tactics in order to fool the masses into accepting its initiative, then the initiative at its very core is not worth consideration. Propaganda is not simply political rhetoric or editorial fervor; it is the art of deceiving people into adopting the ideology you want them to espouse. It is not about convincing people of the truth; it is about convincing people that fallacy is truth. Nothing embodies this disturbing reality of cultural dialogue more than the ill-conceived movement toward gun control in America.

For those who, like Time magazine and its exhaustive treatise on soaring healthcare costs, are shocked and confused how it is possible that prices for some of the most rudimentary staples, among them basic medical care and college tuition, have exploded we have the answer. In fact, we had the answer in August 2012, when we showed our "Chart Of The Day: From Pervasive Cheap Credit To Hyperinflation." As the title, and chart, both imply, the simple reason why college tuition is up 1200% in 35 years, while healthcare fees have soared by a neat 600% or double the official cumulative inflation, is two words: "cheap credit."That  is also the reason why the BLS and the Fed can get away with alleging inflation is sub-2%: because the actual cost for any of these soaring in price services is never actually incurred currently, but is deferred with the only actual outlay being the cash interest, which as everyone knows is now at the ZIRP boundary thanks to 4+ years of ZIRP and three decades of the "great moderation." Which is why we are confident it will come as no surprise to anyone, especially not those who have no choice but to follow the herd and pay exorbitant amounts for a generic higher education that has negligible utility at best in the New "Okun's law is broken" Normal, that tuition at public colleges jumped by a record amount in the past year!