While everyone focuses on the turmoiling in Emerging Markets, a good, old standby is back - the periodic "debt ceiling" IMAX tragicomedy. Recall that the debt limit, which has been suspended since October 17, is scheduled to be reinstated on February 8. At that time, the nation will be operating right at the debt limit, and the Treasury Department will use extraordinary measures to temporarily issue additional public debt to meet federal financial obligations as it always does during episodes of political posturing that without fail take place until the 11th hour, 59th minute, and 59th second. However, unlike last year when there was a 5 month interval between hitting the debt ceiling, and the day the Treasury's funds fully ran out - the infamous X Date - this time the emergency measures will only last a limited time. What this means when looking at a calendar, is that the Treasury may not have sufficient cash-on-hand to cover all obligations due as soon as February 28.
- Emerging markets pray for Wall Street tumble (Reuters)
- Yellen Faces Test Bernanke Failed: Ease Bubbles (BBG)
- Samsung sets new smartphone sales record in fourth quarter, widens lead over Apple (Reuters)
- China’s Foreign-Reserves Investment Chief Said to Depart Agency (BBG)
- China’s Rescue of Troubled Trust May Stoke Risk-Taking (BBG)
- Ukraine PM Azarov offers to resign 'to help end conflict' (Reuters) ... And Russia says may reconsider aid if this happens
- But... but... it was all gold's fault: India Unexpectedly Raises Rate as Rupee Risks Inflation Goal (BBG)
- Former Belgian king 'boycotting' public events after complaining £760,000 is not enough to live on (Telegraph)
- Greek disposable income tumbles 8% in Q3 (Kathimerini)
- Emerging market sell-off raises specter of contagion (Reuters)
- China Bank Regulator Said to Issue Alert on Coal Mine Loans (BBG)
- Argentina to Ease FX Controls After Peso Devaluation (BBG)
- Pimco's Gross problem: who can succeed the 'Bond King'? (Reuters)
- Ukraine protesters seize building, put up more barricades (Reuters)
- Mideast Turmoil Dominates Gathering of Business Elite (WSJ)
- Central Banks Withdraw Dollar Funding (WSJ) - oh really?
- Samsung warns of weak earnings growth this quarter (FT)
- Three explosions rock Cairo, killing 5 (USA Today)
An example of Microsoft legislating profits that is so simple to understand even most Americans should be able to get it.
The Beige Book may well be renamed the Boring Book due to the uniformity of its monthly pronouncements, but a few things stands out in a report that saw moderate expansion in the economy across most of the US:
- the Fed said most districts reported increases in home sales... except we assume for San Francisco where home sales plunged to 6 year low,
- the Fed sees "very few reports of staff cuts of plant closings"... which we guess ignores the December jobs reports where the least jobs were added since January 2011,
- the Fed said nine districts reported an increase in retail spending... which is curious considering retail traffic plunged and the holiday spending season was the worst since 2009,
- the Fed said almost half of district reported prices were stable... which probably means the Fed's inflation benchmark is now well below 2%
- and Finally, the Fed said eight district reported upward movement in wages... which also is confusing considering real disposable income per capita just dropped into the negative.
Oh well: we suppose we will take the Fed's word for it.
By now the distinction that "enrollment" in Obamacare does not actually mean coverage should be painfully clear: one still has to pay, and according to a recent analysis up to 50% of "enrollees" in any given state have not paid, which means the White House's number of 2.1 million sign ups through December 28 is vastly overstating the reality (especially if one ignores the 5+ million of torn up, lost insurance policies as a result of Obamacare). But even if one clearly delineates what is meant by "enrollment" in the most epic failure of a ponzi scheme to ever emerge from a developed nation (with a recently disclosed penchant for Big Brother-yness), what conclusions can one draw about the current participants in obligatory, socialized insurance as most recently disclosed by the administration? Here is the summary: only 24% of all new insured are in the targeted 28-34 age group; only 21% of participants will get no subsidy (which means 79% will be subsidized), and finally more women (54%) than men have signed up.
Have you seen the economic recovery? We haven’t either. But it is bound to be around here somewhere, because the National Bureau of Economic Research spotted it in June 2009, four and one-half years ago. It is a shy and reclusive recovery, like the “New Economy” and all those promised new economy jobs. I haven’t seen them either, but we know they are here, somewhere, because the economists said so. At a time when most Americans are running out of coping mechanisms, the US faces a possible financial collapse and a high rate of inflation from dollar depreciation as the Fed pours out newly created money in an effort to support the rigged financial markets. It remains to be seen whether the chickens can be kept from coming home to roost for another year.
In the first step towards President Obama's income inequality fight, he is unveiling "Promise Zones" today... we can't wait to hear this one..."Promise Zones are a new way of doing business,” the administration official said. “They will be led by local community leadership working toward a common goal … supported by the federal government.” Participants will get priority for federal grants and help applying from an array of agencies. Wonderful, sounds great - how are we paying for that again?
The evidence here is clear. QE does not generate jobs in the broad economy.
Yesterday we described how so-called "Progressives" are pimping for the Empire. The same is true of so-called "Conservatives." Conservatives are masters at projecting a preachy devotion to a limited state, democracy, liberty and free enterprise while their support of the Central State undermines every one of these values. Conservatives are like the preacher who issues stern sermons on righteousness every Sunday while skimming big money from pimping sordid, destructive policies Monday through Saturday. "Conservatives" and "Progressives" alike are pimping for the Empire when they support the Central State's essentially unlimited powers.
White House Guides Down Obamacare Enrollment Target, Says To Focus On Demographics; Refuses To Give Demographic DataSubmitted by Tyler Durden on 01/06/2014 20:13 -0500
“That was never our target number. That was a target that came from the Congressional Budget Office, and it has become an accepted number. There’s no magic to the 7 million. What there is magic to is that in the month of December a million Americans signed up for insurance.”
– White House aide Phil Schiliro, interview on MSNBC, Dec. 31, 2013
The COO of the Centers for Medicare and Medicaid Services, who supervised the disastrous rollout of Obamacare, is retiring. Michelle Snyder is the second official to depart the sinking ship CMS following CIO Tony Trenkle's resignation in November. While in charge of day-to-day activities, the allocation of resources, and “standing up new programs and activities required by the Affordable Care Act," the NY Times reminds readers that Kathleen Sebelius said "Michelle Snyder is not responsible for those debacles." We can only wonder at the retirement package this 41-year veteran will receive...
Obamacare's rollout may be in limbo even though the official deadline has come and gone (despite a much touted 2 million visitors to healthcare.gov on Monday which probably means it should IPO immediately), but the real sticker shock of actual fees awaits. And even as most insurers are opting to keep the full impact of the higher cost hidden, instead adding them to the overhead premiums charged, one company, Blue Cross Blue Shield of Alabama, has itemized the impact of the Unaffordable Care Act by adding a separate line itme for the "Affordable Care Act Fees and Taxes." Here is how these add up according to a breakdown conducted by the Post.
Only 5% of hospitals in American saw year-over-year growth in overall admissions in November, according to Citi. This is the weakest inpatient admission rate on record and comes amid both doctor and patient uncertainty over the Obamacare changes. As Citi's Gary Taylor notes "the paralyzing effect of the impotent Obamacare rollout" and Medicare's new "two-midnight" rule will weigh notably on hospital earnings as doctor's employment and compensation modesl remain in flux. 13 days to go...
There are only a few UK and U.S. banks on the list of global safe banks. This should give pause for thought. Notice that many of the safest banks in the world are in Switzerland and Germany.