Recent news about Federal plans to "help" manage private retirement accounts renewed our interest in the topic of capital controls. One example of capital control is to limit the amount of money that can be transferred out of the country; another is limiting the amount of cash that can be withdrawn from accounts; a third is the government mandates private capital must be invested in government bonds. Though presented as "helping" households, the real purpose of the power grab would be to enable the Federal government to borrow the nation's retirement accounts at near-zero rates of return. As things fall apart, Central States pursue all sorts of politically expedient measures to protect the State's power and the wealth of the political and financial Elites. Precedent won't matter; survival of the State and its Elites will trump every other consideration. All this raises an interesting question: what would America look like at $5000 an ounce gold?
The U.S. health care system is a giant money making scam that is designed to drain as much money as possible out of all of us before we die. In the United States today, the health care industry is completely dominated by government bureaucrats, health insurance companies and pharmaceutical corporations. At this point, our health care system is a complete and total disaster. Health care costs continue to go up rapidly, the level of care that we are receiving continues to go down, and every move that our politicians make just seems to make all of our health care problems even worse. At the same time, hospital administrators, pharmaceutical corporations and health insurance company executives are absolutely swimming in huge mountains of cash. Unfortunately, this gigantic money making scam has become so large that it threatens to collapse both the U.S. health care system and the entire U.S. economy.
Fed officials are well aware that stocks have become totally disconnected from reality. However, they cannot simply come out and discuss ending stimulus efforts outright because it would cause a market collapse. Remember, the single most important role for the Fed post-2008 is to maintain confidence in the system. So they cannot risk any explicit statement that they will be pulling the punchbowl.
- Spain’s Deficit Widened to 10.2% on Bank-Rescue Cost (BBG) - or as Rajoy would say, when one excludes all negatives, it was a surplus
- Monti Austerity Pushes Italians Toward Parliament Upheaval (BBG)
- Russia accuses U.S. of double standards over Syria (Reuters)
- Euro Area to Shrink in 2013 as Unemployment Rises (BBG)
- UK, China central banks to discuss currency swap line (Reuters)
- Italy Court Rejects Challenge to Bailout of Monte Paschi (BBG)
- Japan's Abe to showcase alliance, get Obama to back Abenomics (Reuters)
- Russia’s missing billions revealed (FT)
- China Home-Price Gains May Presage Policy Tightening (BBG)
- Fed unlikely to curtail stimulus despite rising doubts (Reuters)
- Banks face fines up to 30 per cent of revenues (FT) - just as soon as Basel III is passed (i.e., never)
- J.C. Penney Can Raise Billions Under Revised Credit Line (BBG)
- Cost of Dropping Citizenship Keeps U.S. Earners From Exit (BBG)
How Many Constitutional Freedoms Do We Still Have?
The anti-surveillance state movement is gaining traction and following Charlottesville, Virginia becoming the first city to pass anti-drone legislation, the engaged citizenry of Seattle have now succeeded in killing their city’s own drone program earlier this month. On the state level, while legislation has been introduced in several places, it appears Florida is closest to enacting domestic surveillance drone regulations into law. The title of the bill is the “Freedom from Unwarranted Surveillance Act.” This demonstrates that when the citizenry is involved and active we can control our own destiny.
- Here comes the replay of 2011 as China starts the counter-reflation moves: China Central Bank Reverses Cash Pump (WSJ)
- Security group suspects Chinese military is behind hacking attacks (Reuters)
- Iceland Foreshadows Death of Currencies Lost in Crisis (BBG)
- China Allows More Firms to Sell Mutual Funds to Bolster Market (BBG)
- Uncertainty looms for Italians (FT)
- Forget the big comeback; Detroit focuses on what can be saved (Reuters)
- SAC’s Cohen May Face SEC Suit as Deposition Hurts Case (BBG)
- Hollande wrestles with austerity demands (FT)
- Obama Golf With Woods in Florida Risks Muddling Messsage (BBG)
- Simpson and Bowles to Offer Up Deficit (WSJ)
- Aso Says Japanese Government Not Planning Foreign Bond Buys (BBG) - ... until it changes its tune once more
- Abe to Decide on Bank of Japan Governor Nomination Next Week (BBG)
- G20 struggles over forex, at odds over debts (Reuters)
- Alwaleed Sells Airbus A380 to Invest in Middle East Firms (BBG)
- GOP Stalls Vote on Pick for Pentagon (WSJ)
- ECB officials rebuff currency targeting as G20 meets (Reuters)
- Not good for the reflation effort: Muto leads as Japan PM close to choosing nominee for Bank of Japan chief (Reuters)
- M&A Surges as Confidence Spurs Deals in Computers to Consumer (BBG)
- JPMorgan’s head of equity prop trading Gulati to launch own fund (FT)
- Tiffany & Co. sues Costco over engagement rings labeled ‘Tiffany' (WaPo)
- JPMorgan Said to Fire Traders, Realign Pay Amid Slump (BBG)
- Broker draws Tullett into Libor scandal (FT)
- Airbus drops Lithium-Ion batteries for A350 (Reuters)
As always happens when central planning is involved, when one tries to stop a leak here, two new leaks appear elsewhere. Because while the Homeowners Bill of Rights managed to grind foreclosure activity to a halt in California, what is happening elsewhere is the dreaded Boomerang Foreclosure phenomenon, or, said simply, redefaults. In other words, those homeowners who tried to take advantage of the most recent housing bubble mania created over the past year by the unholy trinity of the Fed (open-ended liquidity, REO-to-Rent programs, and $40 billion in monthly purchases of MBS), foreign buyers (who launder illicit money courtesy of the NAR's anti-money laundering exemption and park it in ultra luxury US real estate, usually sight-unseen) and of course, the banks, who with the aid of the robosigning fiasco and the Homeowner Bill of Rights, have over the past year subsidized the housing market by keeping non-cash flow generating mortgages on their books in exchange for a wholesale subsidizied rise in housing prices, ran out of cash before they could flip the "hot potato" that is the house they just bought, to a greater fool, and since they had no actual cash to pay the mortgage with, and with no fear of retribution, handed it right back to the bank. As the chart below shows, while California foreclosure activity is collapsing, things in other places are starting to indicate that the second housing bubble blown by Bernanke in 5 years, is finally starting to crack:
Fraudclosure Fail | ROMAN PINO vs THE BANK OF NEW YORK – Florida Supreme Court: We Can't Stop the FraudSubmitted by 4closureFraud on 02/07/2013 22:17 -0500
There are no ramifications if you get caught defrauding the court. Just take a voluntary dismissal and start over. We now have a court system, an entire judicial system, that supports fraud...
Just as it was all tropical storm Sandy's fault for somehow impacting the national economy from California, to Florida, to Oregon and all the way to Vermont, but more importantly - giving economists a scapegoat on which to blame the acute weakness in economic data in the November timeframe, so tomorrow's "historic" blizzard will be the inevitable reason for which the economy will once again perform "below expectations." It will have nothing to do with the ongoing reign of authoritarian terror conducted by the residents of the Marriner Eccles building, which has made a baseline growth rate of 1% in the artificial economy an optimistic outcome. Because, as everyone knows, in a centrally-planned, priced to absolute perfection economy, no exogenous variables, such as snow storms in the middle of winter, can possibly be allowed or certainly factored for. Which is why expect to hear a whole lot more in the next 24 hours about Blizzard Nemo: after all propaganda patterning demands that everyone has a clear image of the perpetrator when the time comes to cast all blame on one single event and to distract from the real cause of now structural underlying economic weakness.
Many of the banks, now predicting gold’s bull market will end in 2013, never predicted gold’s bull market in the first place. Most were bearish on gold in the early to mid years of the bull market and most only became bullish quite recently.
Many of these banks' primary focus is short term profit, often trading profits, and therefore they do not understand the long term, passive diversification benefits of gold in a portfolio or as financial insurance.
When it comes to "get rich quick" housing schemes, one can be a bank prop trading desk or a hedge fund, with access to the Federal "REO-To-Rent" program which grants a costless purchase of distressed real estate with zero cash down, in order to facilitate the subsidized removal of housing inventory from the market, or, if one is not too big to fail, one can simply pull off an Andre Barbosa, the infamous Boca Raton squatter who used the "adverse possession" loophole to claim title to a multi-million mansion. Or, as it turns out now, one can take advantage of the latter and lever it up even more, by renting out other people's foreclosed property without ever being present, while claiming ownership rights through "adverse possession", keeping the inbound cash flow while having someone else on the hook should the cops come knocking.
It was just a matter of time before the most powerful crony capitalist bank in America decided to join the housing trade. Making money running the food stamp program just wasn’t enough for Your Crony Highness Jamie Dimon and company, it’s time to join his financial oligarch brothers in the bidding war to corner the housing market and become your overlord. That way they can control how you eat (food stamps) and where you sleep. It’s become very clear what the large financial interests in these United States are attempting. Funnel all the low interest crony American money, with a dash of Chinese laundered money, into the “housing recovery.”