Medicare

If America is the Land of Opportunity, why are so many parents worried that their princeling/princess might not get into the "right" pre-school, i.e. the first rung on the ladder to the Ivy League-issued "ticket to the upper middle class"? The obsessive focus on getting your kids into the "right" pre-school, kindergarten and prep school to grease the path to the Ivy League suggests there aren't as many slots open as we're led to believe.

• Google's new CFO to make $70 million (WSJ)
• Senate passes Republican budget with deep safety net cuts (Reuters)
• With Yemen strikes, Saudis show growing independence from U.S. (Reuters)
• Banks Slash Dividends as Loans Sour From Beijing To Pearl River (BBG)
• North American Railroads Caught by Speed of Crude-Oil Collapse (BBG)
• Japan’s Zero Inflation a Setback for Abenomics (WSJ)
• Cooperman Says U.S. Seeks Information About Omega Trades (BBG)

After a few days of dollar weakness due to concerns that the Fed's rate hike intentions have been derailed following some undisputedly ugly economic data (perhaps the Fed should just make it clear there will never be rate hikes during the winter ever again) the USD has resumed its rise, and as a result risk assets, after surging early in the overnight session driven by the Nikkei225 and the Emini, the "strong dollar is bad for risk" trade has re-emerged, with the Nikkei dropping almost 500 points off its intraday highs, with US equity futures poised to open lower once more, sliding nearly 20 points in the overnight session, and surprising the BTFDers who have not seen five consecutive days of "risk-off" in a long time.

“I am for doing good to the poor, but…I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed…that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.” - Benjamin Franklin

Between 2000 and today, the global bond market has nearly TRIPLED in size. Today, it’s north of $100 trillion in size. And it’s backstopping over $555 trillion in derivatives trades.

In the previous installments of this series, we discussed the hidden and often unspoken crisis brewing within the employment market, as well as in personal debt. The primary consequence being a collapse in overall consumer demand, something which we are at this very moment witnessing in the macro-picture of the fiscal situation around the world. Lack of real production and lack of sustainable employment options result in a lack of savings, an over-dependency on debt and welfare, the destruction of grass-roots entrepreneurship, a conflated and disingenuous representation of gross domestic product, and ultimately an economic system devoid of structural integrity — a hollow shell of a system, vulnerable to even the slightest shocks.

• Germans Tired of Greek Demands Want Country to Exit Euro (BBG)
• Weak euro powers European stocks to new highs (Reuters)
• Siemens Cheers Euro Slump as Emerson Eases Dollar’s Sting (BBG)
• A Police Gadget Tracks Phones? Shhh! It’s Secret (NYT)
• If Economists Were Right, You Would Have a Raise by Now (BBG)
• iWatch: who’s going to pay $17K for a device that will be obsolete in two years? (Barrons)
• Ferguson Suspect Said to Claim He Wasn’t Firing at Police (BBG)
• Why Bankers Are Leaving Finance for No-Salary Tech Jobs (BBG)

In the first part of this article series, we discussed the true state of global demand, along with the unstable situation within numerous indicators from exports to retail. Swiftly falling global demand for raw materials as well as consumer goods is an undeniable reality. This is a distinct problem in terms of the U.S., which has been, up until recently, the primary consumption driver for much of the world. As we will show, U.S. demand is about to fall even further into the abyss as real unemployment and personal debt take their toll.

Having recently explained why the stock market is extremely overvalued (in his own words by Fed-driven multiple expansion alone), Alan Greenspan - seemingly brimming over with the need to remedy his years of lies/mistruths with some uncomfortable truthiness - is now taking on the US Dollar ("it is not from a strong US economy but a weak rest of the world") and oil prices (America has a massive surplus of oil and there may soon be nowhere to store all of it, "we'll be lucky if we can get $40 for it.")

Sometime next year Social Security’s $150 billion disability-insurance program will become insolvent. Congressional loosening of benefit requirements, and more-importantly allowing people to remain on disability effectively for life once they gain it (less than 1% of the people on disability return to the workforce in any given year) make the problem one that is utterly intractable without major changes. And so Congress' bipartisan Social Security Advisory Board has urged change...like shifting funds to the Social Security disability fund from the Social Security retirement fund.

All of the biggest problems in the financial world revolve around the bond markets today: Greece, Japan, the Fed's interest rate hike, etc.

Who should you believe? Record stock market valuations and consensus spouting, highly paid economists who tell you all as is well...or oil, negative economic indicators, and your own eyes that this is just one more artificial boom desperately trying to run from the inevitable bust?

TINA and the complacent belief in free lunches strip the resiliency from a system and leave it vulnerable to collapse...

What in god’s name does Janet Yellen think she is doing? Just a few weeks ago she established the ridiculous Fedspeak convention that “patient” means money market rates will not rise from the zero bound for at least two meetings. Now she has modified that message into “not exactly”.

Learning the Facts Will Help Protect You From Heart Disease, Stroke ... And Stupid Trades