en How "Unequal" Is Your State? <p><a href=""><em>Submitted by Salil Mehta via Statistical Ideas blog</em></a>,</p> <p><strong>It&#39;s an appealing chart&nbsp;from this week&#39;s Economic Policy Institute&#39;s <a href="" rel="nofollow" target="_blank">report</a>, leveraging the fashionable, French economist Piketty&#39;s statistics, in order to illustrate how well the &quot;top 1%&quot;&nbsp;are doing in each of the 50 states. &nbsp;The report is provokingly titled: &quot;The Increasingly Unequal States of America&quot;.</strong> &nbsp;But<u><strong> the report creates distortions in the truth</strong></u>.&nbsp; An important matter affecting hundreds of millions should also include a&nbsp;straight&nbsp;acknowledgement of&nbsp;probability theory.&nbsp; We see through this article, that beyond the obvious national-level inequality (those at the&nbsp;top versus those at&nbsp;the bottom), targeting&nbsp;state-level differences in values is perverse.&nbsp; <u><strong>The latter is more a matter of probability theory, involving&nbsp;large sample sizes.</strong></u></p> <p>Let&#39;s start by looking at this chart below.&nbsp; It shows the differences in state-level ratios, contrasting the typical incomes&nbsp;at the top 1% versus the typical incomes at the bottom 1%:<br />&nbsp;</p> <div class="separator" style="clear: both; text-align: center;"><a href="" style="margin-left: 1em; margin-right: 1em;"><img src="" style="border-width: 0px; border-style: solid; width: 600px; height: 513px;" /></a></div> <p><strong>Everyone from the press, to news readers, gawk at how much each state&#39;s levels are, in relation to the levels of other arbitrary states. &nbsp;But this is irrational. &nbsp;Are liberal states&nbsp;such as&nbsp;California and New York, twice as biased (or twice as unfair) as conservative states such of Arkansas and Maine?&nbsp;&nbsp;Of course not. &nbsp;But that&#39;s the poor logic one would convey from the former two states&nbsp;showing nearly twice the inequality values on the chart, versus the latter two states. </strong>&nbsp;Ex-post examination of living costs doesn&#39;t fully explain things either, as expenses are generally higher in states such as Vermont, Alaska, and Hawaii, versus the expenses in states such as Texas, Illinois, and most of Appalachia.</p> <p>This week I&nbsp;devoted a&nbsp;couple hours spelling out to a confused&nbsp;Wall Street Journal writer how there is some pertinence here, related to probability theory. &nbsp;Population size theoretically impacts these statistics, and <strong><u>only a&nbsp;small number of these states are grossly unequal enough to warrant exhibiting them through a charming, 50-state map</u></strong>. &nbsp;Whenever we are forced to explore state-level analysis though, it should be done through the prism of simply explaining&nbsp;<em>relative variation</em>, well beyond what random luck would suggest.</p> <p><u><strong>The most liberal people&nbsp;suggest that even thinking about this math is unnecessary.</strong></u> &nbsp;<strong>Perhaps any&nbsp;glorification of wrongs that need to be righted, justifies the means that it would take to get there. &nbsp;Over time this can conflate math ideas&nbsp;with one&#39;s&nbsp;ideological&nbsp;bias. &nbsp;We must separate the discussion of national and structural inequality, <i>among</i> a population, from one where there is a perceived advantage for some groups relative to others.</strong></p> <p>We&nbsp;can&#39;t prove the inappropriateness of inequality, by&nbsp;looking at the differences in relative inequality between states.&nbsp; We enjoy the right in the U.S. to pursue different outcomes. &nbsp;To take risks on the margins.&nbsp;&nbsp;We&#39;ve been making many billions of these choices, across generations. &nbsp;This means that we always enjoy some separation in outcomes, particularly among the largest populations.</p> <p>That&#39;s how probability theory impacts all of our lives, even in &quot;equal&quot; conditions.&nbsp; We would prefer a safety net against hard times.&nbsp; Yet we will still take risks such as how much&nbsp;and what we learn, what&nbsp;we&nbsp;feed our bodies, what we do on vacation, what financial investments we accept, when we plot a career change...&nbsp;the actions here can&#39;t be&nbsp;deemed some unfair inequality.&nbsp;&nbsp;They are the mystical elements&nbsp;we call&nbsp;life!</p> <p>In a divergent context, we will always see these interesting differences (based upon population size&nbsp;alone), in areas that have nothing to do with the draw of inequality.&nbsp; Such as the state-level distribution of&nbsp;newborn baby sizes, or the performance distributions of high-school athletes.&nbsp; We&#39;ll mention others still later in this article.&nbsp; And all of this collectively confirms our understanding that there is something important to the probability math, explaining the <em>relative</em> <i>dispersions</i> connected to population sizes.</p> <p>Before moving too far ahead, let&#39;s first show that the Economic Policy Institute (EPI) chart above has an obvious concordance between income dispersion and the population size itself. &nbsp;We&#39;ll use simple arithmetic(!) as well, substituting for a complex probability area known as copula math (<a href="">here</a>, and <a href="">here</a>).&nbsp; If there were no connection between a state&#39;s inequality calculations and the population rank, then how many states would be in the top 10&nbsp;of both?&nbsp; What about in the bottom 10&nbsp;of both?&nbsp; The answers are quite low:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em><span style="color: #999999;">(10/50)*(10/50)*50 = 2 states in the top 10 of both of both variables</span></em></strong></p> <p>&nbsp;</p> <p><strong><em><span style="color: #999999;">(10/50)*(10/50)*50 = 2 states in the&nbsp;bottom 10 of both variables</span></em></strong></p> </blockquote> <p>So only&nbsp;<b>4</b> (2+2) states total. &nbsp;But it&#39;s easy to certify from the chart that there is much more of a match among these variables than <strong>4</strong>.</p> <p>Of the top 10 populated states, 5 were also among the top 10 &quot;unequal&quot; states: CA, TX, FL, NY, IL.&nbsp;&nbsp;Of the 10 least populated states, 4 were also among the 10 least &quot;unequal&quot; states: VT, AK, ME, HI. &nbsp;So instead of <b>4</b> overlapping states, we have a significantly higher <b>9</b> (5+4) states overlapping.&nbsp;&nbsp;Additionally, there are no crossover states&nbsp;(e.g., a highly &quot;unequal&quot; less-populated state, nor a less &quot;unequal&quot; highly-populated state).&nbsp; The easy math (<b>9</b>&gt;<b>4</b> with no crossovers) shows something, and it&#39;s not structural inequality.</p> <p><strong>The only common variable between the selection of the top 10 (and&nbsp;in the selection of the bottom 10) populated states is just <em>population size&nbsp;</em>itself!</strong> &nbsp;Does population size coerce inequality? &nbsp;Again, no.&nbsp; Otherwise we could just split California into two smaller states, making citizens suddenly feel there is&nbsp;somehow &quot;greater equality&quot;.&nbsp; Or we could reunite Virginia and West Virginia, making the new super-state&#39;s citizens feel there is magically &quot;greater <em>in</em>equality&quot;. &nbsp;But this sort of statistical reasoning is crazy.&nbsp;&nbsp;It leads one to think inequality can be solved with scissors and glue.</p> <p><strong>In&nbsp;our popular&nbsp;&quot;<a href="">Aristocrats in flyovers</a>&quot;&nbsp;article (a name suggesting easier state-level wealth in less-populated flyover states), we dig into the probability theory of <em>extreme</em> data.&nbsp; And there&nbsp;we continue to see this pattern show up repeatedly in diverse datasets.&nbsp; Such as the wealthiest individual per state, or the number of cumulative Miss America winners per state. </strong>&nbsp;Again this couldn&#39;t be coincidence, and we can also mathematically solve for the theoretical expected values for parametric&nbsp;most <em>extreme</em> individual, as we did in this article&nbsp;<a href="">here</a>.<br /><span style="color: red;">&nbsp;</span><br /><u><strong>Take a look at the&nbsp;bar chart below (of the top 1% income), and see in dots how <em>tight</em> the trend is for relative inequality, versus state population.</strong></u> &nbsp;We mathematically expect the more populated states to have considerably higher top 1% income (a double-digit percent increase!), versus the top 1% income in the less populated states- and this relates to the EPI chart above.&nbsp; Connecticut was the single, unreliable outlier removed, using a parallel statistical process others also do (notice Wyoming is missing in the aforementioned chart.)<br />&nbsp;</p> <div class="separator" style="clear: both; text-align: center;"><a href="" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="395" src="" width="640" /></a></div> <p> </p><p>We also show a related transformed bar chart, below, instead fixating on changes in the the relative standard confidence interval (as one moves across the chart from the less populated states, to the most populated states). &nbsp;We can now confirm that we mustn&#39;t ignore probability modeling as part of this story. &nbsp;<strong>We can&#39;t&nbsp;persistently pretend that less-progressively larger (a generally concave inequality dispersion&nbsp;function, similar to how it is with most economic data) inequality&nbsp;<em>doesn&#39;t exist</em>, for the most populated states.</strong><br />&nbsp;</p> <div class="separator" style="clear: both; text-align: center;"><a href="" style="margin-left: 1em; margin-right: 1em;"><img src="" style="border-width: 0px; border-style: solid; width: 599px; height: 371px;" /></a></div> <p><strong>Don&#39;t assume -as many lay people and activists do- that&nbsp;these are&nbsp;sampling errors that must<em>&nbsp;vanish</em>, as the sample population sprouts into the millions.&nbsp; This would be deceitful&nbsp;and cause most people to further jump on top of similar &quot;research&quot; as the EPI chart, falsely connecting most of the state-level calculation differences to genuine differences in inequality.&nbsp;</strong></p> <p><em>The conclusions of this article are again as pertinent for the top 1% in a population, as it is for the most extreme person in any group. &nbsp;This is since the top 1% is still extreme enough along the probability distribution (from 0%, to 100%), so that larger populations will lead to less-progressively larger, top percentile thresholds.&nbsp; Of course this is not true for sampling (Ch.5&nbsp;in <a href="" rel="nofollow" target="_blank">Statistics Topics</a>)&nbsp;closer to the middle of&nbsp;a peer distribution (e.g., top 49%, or bottom 49%), where most of us in society&nbsp;have performed&nbsp; through the ages.</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="611" height="386" alt="" src="" /> </div> </div> </div> Illinois PrISM Wall Street Journal Sat, 31 Jan 2015 22:15:52 +0000 Tyler Durden 501253 at The Official White House Terrorist Identification Chart <p>Presented with no comment...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="401" /></a></p> <p>&nbsp;</p> <p><a href=""><em>Source:</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="987" height="660" alt="" src="" /> </div> </div> </div> White House Sat, 31 Jan 2015 21:30:52 +0000 Tyler Durden 501252 at ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece <p>As Deutsche Bank's George Saravelos politely puts it, "Developments since the Greek election on Sunday have moved very fast." And indeed, so far the new Tsipras cabinet, and here we focus on the words and deeds of the new finance minister Yanis Varoufakis, has shown that the market's greatest hope - that the status quo in Greece will continue - has been crushed into a pulp (and so have Greek stock and bond prices) especially following yesterday's most <a href="">recent comments by the finmin </a>in which he said that Greece "<strong>does not want the $7 billion</strong>" from the Troika agreement and that it wants to "rethink the whole program", culminating with an epic exchange with Eurogroup chief Jeroen Dijsselbloem in which Greece made it clear that the "constructive talks" are over. </p> <p>And suddenly the Eurozone is stunned, because what had until now been its greatest carrot when it comes to dealing with Greece, has become completely useless when the impoverished, insolvent nation itself says it no longer needs a bailout, seemingly blissfully unaware of the consequences. </p> <p>So earlier today the ECB's Erikki Liikanen, tired of pleasantries and dealing with what to Europe is a completely incomprehensible and illogical stance, one which is essentially a <em>massive defection </em>by Greece in the European "prisoner's dilemma", and which while leading to a Greek financial collapse and Grexit - <strong>both prerequisites to a subsequent Greek economic recovery unburdened by the shackles of the Euro - </strong>would also unleash a European depression, came out and directly threatened Greece that it now has 1 month until the end of February to reach a deal with the Troika, <strong>or else the ECB would cut off lending to Greek banks, in the process destroying the otherwise insolvent Greek banking sector. </strong></p> <p>And since only the ECB backstop has prevented a banking sector panic, the ECB is essentially betting the house, and the sanctity of the Eurozone (because after a Grexit all bets are off which peripheral leaves next) that the threat, and soon reality, of a bank run (at last check Greece had about €145 billion in deposits still left in its bank after JPM's latest estimate of €15 billion in outflows in January) will finally force Varoufakis and Tsipras to sit at the negotiating table with the understanding that not they but the Troika has all the leverage.</p> <p><a href="">Reuters explains</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>A deal on extending Greece's bailout deal must be found by the end of February or the European Central Bank will not be able to continue lending to its banks, ECB council member Erkki Liikanen said on Saturday. </strong>Europe's bailout programme for Greece, part of a 240-billion-euro ($270 billion) rescue package along with the International Monetary Fund, expires on Feb. 28 and a failure to renew it could leave Athens unable to meet its financing needs and cut its banks off from ECB liquidity support. </p> <p>&nbsp;</p> <p>Greece's new leftist government, which aims to ease the strict terms of the bailout that have imposed harsh austerity, opened talks with European partners on Friday by flatly refusing to extend the current programme or to cooperate with the international inspectors overseeing it. </p> <p>&nbsp;</p> <p><strong>"We (ECB) have our own legislation and we will act according to that... Now, Greece's programme extension will expire in the end of February so some kind of solution must be found, otherwise we can't continue lending," </strong>Liikanen, also the governor of Finland's central bank, told public broadcaster YLE. </p> <p>&nbsp;</p> <p>"I don't believe that one can hide from the realities in the economy," he said in an interview. </p> </blockquote> <p>And then another hint from the ECB, this time from Vitor Constancio. As <a href="">Bloomberg notes</a>, "at the moment, Greece has a special dispensation from the ECB because it’s complying with a bailout program. That means its debt can be used in central bank refinancing operations even though it is rated junk. <strong>“There will be no surprises if we find out that a country is below that rating and there’s no longer a program that that waiver disappears,” </strong>ECB Vice President Vitor Constancio said at an event in Cambridge, England, on Saturday."</p> <p>The question arose why when Greece already has undergone a Private Sector Involvement restructuring, i.e. a bankruptcy that however only impacted private entities and not official ones, such as the ECB, can't Greece have another debt haircut to which Liikanen responded that: "A significant debt restructuring has been carried out with private investors. The ECB cannot fund a state directly, which is what it would mean in this case."</p> <p>Odd: because that is precisely what the ECB is doing with QE, when it monetizes any of a number of Eurozone deficits. To this Liikanen also had a quick response:</p> <ul> <li><strong>LIIKANEN SAYS ECB ISN'T FINANCING EURO GOVERNMENTS' DEFICITS</strong></li> </ul> <p>Well, it is, but we'll let that slide for the time being. The bigger issue is that since the ECB directly holds tens of billions of Greek debt, any impairment on this debt would crush what the ECB has been saying from day one: that it can <em><strong>not </strong></em>suffer losses on the debt it has monetized or otherwise transferred over to its balance sheet. Such an impairment would immediately destroy Draghi's credibility, and promptly lead to furious screams from around the Eurozone as taxpayers suddenly realize all too well they are on the hook for funding the Eurozone's most insolvent members, first Greece and then everyone else who has already entered a toxic deflationary spiral. And since the ECB would finally be exposed for being Europe's "bad bank", the scramble to dump as much toxic exposure on Draghi would begin in earnest in the process launching the beginning of the end of the Eurozone. </p> <p>One can almost see why Greece does think it has all the leverage.</p> <p>That said, Greece now also has a countdown in which it can and will have to make a decision what to do with its leverage, and precisely 28 days until its very own D-Day which is now February 28, 2015 as per today's ECB threat. </p> <p>So with February now shaping up to be an even more volatile month for Europe, and thus the world, than January and December (both of which closed red) here is the full schedule of events and what the "known unknowns are" in the next 4 weeks, courtesy of Deutsche Bank.</p> <p><em>From George Saravelos' Update on Greece</em></p> <p>It is worth bearing in mind that the timing, scope and commitment to the policy changes announced by Greek ministers is highly uncertain, not least because the legislative agenda is likely to be directed by the leadership team of the new government rather than individual line ministries. This still leaves plenty of uncertainty on the new government’s intentions. On the more negative side, the breadth of statements was so wide and the speed with which they were made so quick, that we now consider an extension of the February 28th program expiry date as<em><strong> a key date </strong></em>within the negotiation process: <strong>Europe and the Troika are very likely to request an explicit commitment from the Greek government to close the current mission review and not reverse previous policy</strong>. The precise form such a commitment would take is unclear at this stage, but our underlying assumption is that uncertainty around the new government’s policy intentions is so high, that Europeans will request assurances before proceeding with more in-depth negotiations over the program in Q2.</p> <p>In turn, the above developments will likely have important implications for Greek bank financing at the ECB. Termination of the program on February 28th renders GGB-based collateral ineligible at Eurosystem refinancing operations, but still allows Greek banks to shift funding to Emerency Liquidity Assistance. <strong>However, ELA usage is under bi-weekly ECB review and is very likely to be on a rising trend over the next few weeks<span style="text-decoration: underline;">: to accommodate potential deposit flight</span>; to absorb foreigners’ refusal to roll-over t-bills that are maturing; and to absorb fresh government t-bill issuance to finance upcoming debt repayments to the IMF and other obligations</strong>. These large needs make it likely that the availability of ELA usage is itself linked to program extension above. </p> <p>All of the above then leaves three things that need to be clarified over the next few weeks. </p> <p><em><span style="text-decoration: underline;"><strong>First,</strong></span></em> under what conditions would the Troika be willing to extend the program and what form would this extension take? Our initial expectation was that a technical extension would have been offered to July followed by a successor ECCL program. Recent market developments and poor budget execution leave Greece’s ECCL eligibility an open question however, and it is possible that the Troika now only accepts program extension by a full year to coincide with the conclusion of the IMF program in March 2016. Such a large extension would be more difficult for the Greek government to manage domestically. </p> <p><em><span style="text-decoration: underline;"><strong>Second,</strong></span></em> does the ECB link Greek bank ELA provision to program extension as well? Given rising usage over the next few months, we would consider this an increasing possibility. </p> <p><em><span style="text-decoration: underline;"><strong>Third,</strong></span></em> what will the Greek government’s response to these conditions be? Public statements over the last 48-hours make it particularly difficult to envisage the government’s reaction function. On the one hand an offer of a one year extension and a written commitment to close the review would be particularly difficult for the government to manage domestically. On the other hand, the suspension of ECB financing of Greek banks would be exceptionally damaging to the economy. </p> <p>Here is an indicative timeline of key events that will likely provide answers to these questions: </p> <ul> <li><strong>Friday January </strong>30th – Eurogroup President Dijsselbloem meets with the Greek finance minister Varoufakis and Deputy PM Dragasakis in Athens. A press conference will follow, with the meeting likely setting the tone of negotiations to follow. </li> <li><strong>Sunday February 1st </strong>- Greek finance minister Varoufakis meets UK finance minister Osborne in London </li> <li><strong>Monday February 2nd</strong> – Greek finance minister Varoufakis meets French finance minister Sapin in Paris Tuesday </li> <li><strong>February 2nd </strong>- Greek finance minister Varoufakis meets Italian finance minister Padoan in Rome </li> <li><strong>Wednesday February 4th-5th</strong> – Bi-weekly ECB review of ELA </li> <li><strong>Wednesday February 4th</strong> – Likely t-bill auction to cover 1bn redemption on 6th </li> <li><strong>Thursday February 5th </strong>- Greek parliament opens, elects new speaker of the House </li> <li><strong>Saturday February 7-9th </strong>Government presents legislative agenda to parliament, vote of confidence midnight Monday 9th </li> <li><strong>Wednesday February 11th </strong>– Likely tbill auction to cover 1.4bn maturity on 13th </li> <li><strong>Thursday February 12th </strong>– European Council of EU Leaders, Tsipras likely to meet Merkel on sidelines </li> <li><strong>Friday February 13th </strong>– Voting for new Greek President begins, EC Commissioner Avramopoulos most likely candidate as per various media reports, originating from New Democracy. Likely completed by second round on the following day requiring 151 MP majority </li> <li><strong>Monday February 16th </strong>– Eurogroup where Greece likely to be top of agenda, conditions for extension of program to be made explicit by now </li> <li><strong>Wednesday February 18th-19th- - Bi-weekly ELA review </strong></li> <li><strong>Saturday February 28th </strong>– Current EFSF program expires</li> </ul> <p>In sum, developments and pressure on Greece have accelerated over the last few days, with a very large degree of uncertainty around both the Greek government’s and Troika’s position on how negotiations will proceed. We expect this to be ultimately resolved by a Troika request from the Greek side to commit to program completion and the broad contours of previously committed policy, particularly with regard to structural reform. In turn, program extension may itself be linked to ongoing ECB/ELA financing of Greek banks. The precise form this request takes and the Greek government’s reaction will ultimately determine the path Greece takes in coming weeks and months.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="833" alt="" src="" /> </div> </div> </div> Bad Bank Bank Run Bond Deutsche Bank European Central Bank Eurozone Greece International Monetary Fund Reality recovery Reuters Sat, 31 Jan 2015 21:00:54 +0000 Tyler Durden 501241 at We Ignore Unintended Consequences At Our Peril <p>Submitted by Chris Martenson via Peak Prosperity,</p> <p>Early in my business career, I was faced with a challenge that gave me an appreciation for a critical lesson about life and business. It&#39;s that oftentimes, even with the best of intentions, our actions create consequences completely different from what we intend.</p> <p>It&#39;s that insight that makes me so concerned about the grand central banking experiment being conducted around the globe right now. With little more than a lever to ham-fistedly move interest rates, the central planners are trying to keep the world&#39;s debt-addiction well-fed while simultaneously kick-starting economic growth and managing the price levels of everything from stocks to housing to fine art.</p> <p>As with an earlier article I wrote focusing on <a href="" target="_blank">the Bullwhip Effect</a> phenomenon: the complexity of the system, the <a href="" target="_blank">questionable credentials</a> of the decision-makers, and the universe&#39;s proclivity towards unintended consequences all combine to give great confidence that things will NOT play out in the way the Fed and its brethren are counting on.</p> <h2>A Puzzle To Solve</h2> <p>Two years after graduating business school, I joined the team at Yahoo! Finance as its Marketing lead. It was a crazy time there; the tech bubble was in mid-burst and advertiser dollars -- the main source of revenue for the business unit -- were fast drying up. We went through several general managers within my first year there as the leadership scrambled for a sound course to chart.</p> <p>Amidst the turmoil, a lot of misfit projects were tossed in my lap. Partly because I was the &quot;new guy&quot; and least likely to refuse, but mostly because the engineering-driven culture there didn&#39;t quite know what to do with a marketer, so any square peg looked like fair game.</p> <p>One of those projects was the Yahoo! VISA card. A few years before my arrival, VISA approached Yahoo! with an idea everybody thought a winner: <em>Our credit card + your massive audience = lots of money to be made</em>. So a snazzy purple card was minted, which Yahoo! committed to promote with a certain chunk of its prodigious banner ad inventory.</p> <p>By the time the project fell to me, I was told that things weren&#39;t working out to either party&#39;s hopes. VISA was disappointed and Yahoo! felt it wasn&#39;t getting enough money in return to merit the value of advertising inventory it was blocking off. But no one seemed to have any details to share. Apparently things had been running mostly on autopilot, with no one held accountable for oversight. So, I started doing a little digging.</p> <p>On the Yahoo! side, I made sure the ads were running in the channels of our network where we knew &quot;people who spend money&quot; were most likely to be: Finance, Real Estate, Shopping, Autos, etc. We were also using targeting profiles that looked for users in favorable demographics (peak earning ages, high-earning professions, affluent zip codes, etc). So, it seemed our marketing plan was sound, and indeed, the click-through rates on the ads were well above normal. We were sending a lot of leads over to VISA.</p> <p>Things got murkier when talking with the VISA folks. &quot;The quality of your leads is terrible&quot;, they told me. Which puzzled me at first. I double-checked the data and confirmed the demographics of the people targeted by the ads were solid -- substantially better, in fact, than the median Yahoo! user. And Yahoo!&#39;s user base was so vast, there was no reason to suspect it should be materially different than other mass market audiences VISA marketed to.</p> <p>So if our audience was good, and our ads were generating plenty of leads, why was our relative performance so much worse?</p> <h2>Attracting The Undesirable</h2> <p>The &#39;aha!&#39; moment came once I learned <em>why</em> our leads were getting rejected. Their credit scores were terrible.</p> <p>This was something I was blind to when running my ads on Yahoo!. I could see what a user was interested in (for example, stocks), I knew he was a 45-54 year-old male living in a zip code that had an average household income of $100,000 (say, Newport Beach, CA), but I had no ability to know if he managed his finances wisely or not. He could be up to his eyeballs in debt, and he&#39;d look no different to me than his debt-free neighbor.</p> <p>So for some reason, all the reckless spendthrifts were responding to my ads much more than the prudent savers. <em>Why?</em> I wondered.</p> <p>And then it hit me: this was a classic example of <a href="" target="_blank">adverse selection</a>.</p> <p>Think about it for a moment. What do you often see when you open up your mailbox? A bunch of offers for credit cards. Who doesn&#39;t get those? People with bad credit.</p> <p>And if you have bad credit, chances are your finances aren&#39;t in great shape. Meaning: you&#39;d sure like some credit if you could get your hands on it.</p> <p>So, those were the people who were thrilled to see the banner ads I was serving, and who rushed to click on them and apply for the card.</p> <p>The entire &#39;win-win&#39; strategy originally struck between VISA and Yahoo! was failing due to a massive unintended consequence. <strong>The people we least wanted to respond to the offer were in fact the ones most motivated to do so.</strong></p> <h2>Acknowledging The Reality Of Unintended Consequences</h2> <p>I see a lot of similar unintended consequences in the strategies that the Federal Reserve and its central banking brethren have been pursuing over much of the past decade.</p> <p>The global financial system wants to correct via natural market forces, due to slower economic growth and excessive debt levels around the world. But the central banks have decided to thwart nature by intervening to prop up insolvent institutions and reduce the cost of debt, all in hopes of buying enough time for the system to grow out of its woes.</p> <p>But nearly 7 years after the 2008 crisis and $Trillions upon $Trillions in stimulus, where are we? With moribund economic growth and an ever bigger wealth gap than ever before, as this recent video explains:</p> <p><iframe allowfullscreen="" frameborder="0" height="281" mozallowfullscreen="" src="//" webkitallowfullscreen="" width="500"></iframe></p> <p>&nbsp;</p> <p>Quite simply, the strategy is not working out according to plan.&nbsp;</p> <p>And very likely compounding these unintended consequences is the basic principle of uncertainty. In his article <a href="" target="_blank">Why Our Central Planners Are Breeding Failure</a> Charles Hugh Smith recently opined on how unknowable much of the results of current monetary policy will be, despite the Fed et al&#39;s assurances that they have everything well under control:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>As noted above, any policy identified as the difference between success and failure must pass a basic test:&nbsp;<em>When the policy is applied, is the outcome predictable?</em>&nbsp; For example, if central banks inject liquidity and buy assets (quantitative easing) in the next financial crisis, will those policies duplicate the results seen in 2008-14?</p> <p>&nbsp;</p> <p>The current set of fiscal and monetary policies pursued by central banks and states are all based on lessons drawn from the Great Depression of the 1930s. The successful (if slow and uneven) &ldquo;recovery&rdquo; since the 2008-09 global financial meltdown is being touted as evidence that the key determinants of success drawn from the Great Depression are still valid: the Keynesian (or neo-Keynesian) policies of massive deficit spending by central states and extreme monetary easing policies by central banks.</p> <p>&nbsp;</p> <p>Are the present-day conditions identical to those of the Great Depression? If not, then how can anyone conclude that the lessons drawn from that era will be valid in an entirely different set of conditions?</p> <p>&nbsp;</p> <p>We need only consider Japan&rsquo;s remarkably unsuccessful 25-year pursuit of these policies to wonder if the outcomes of these sacrosanct monetary and fiscal policies are truly predictable, or whether the key determinants of macro-economic success and failure have yet to be identified.</p> </blockquote> <p>It&#39;s this concern about the failure of the current strategy our central planners are pursuing, paired with tremendous magnitude of the impending cost of that failure, that motivated Chris to issue our recent report <a href="" target="_blank">The Consequences Playbook</a>, which begins:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>What&rsquo;s really happened since 2008 is that central banks decided that a little more printing with the possibility of future pain was preferable to immediate pain.&nbsp; Behavioral economics tells us that this is exactly the decision we should always expect from humans. History says as much, too.</p> <p>&nbsp;</p> <p>It&rsquo;s just how people are wired. We&rsquo;ll almost always take immediate gratification over delayed gratification, and similarly choose to defer consequences into the future, especially if there&rsquo;s even a ridiculously slight chance those consequences won&rsquo;t materialize.</p> <p>&nbsp;</p> <p>So instead of noting back in 2008 that it was unwise to have been borrowing at twice the rate of our income growth for the past several decades -- which would have required a lot of very painful belt-tightening -- the decision was made to &lsquo;repair the credit markets&rsquo; which is code speak for: &lsquo;keep doing the same thing that got us in trouble in the first place.&rsquo;</p> <p>&nbsp;</p> <p>Also known as the &lsquo;kick the can down the road&rsquo; strategy, the hoped-for saving grace was always a rapid resumption of organic economic growth. That&rsquo;s how the central bankers rationalized their actions. They said that saving the banks and markets today was imperative, and that eventually growth would return, thereby justifying all of the new debt layered on to paper-over the current problems.</p> <p>&nbsp;</p> <p>Of course, they never explained what would happen if that growth did&nbsp;<strong>not</strong>&nbsp;return. And that&rsquo;s because the whole plan falls apart without really robust growth to pay for it all.</p> <p>&nbsp;</p> <p>And by &lsquo;fall apart&rsquo; I mean utter wreckage of the bond and equity markets, along with massive institutional and sovereign defaults. That was always the risk, and now we&rsquo;re at the point where the very last thing holding the entire fictional edifice together is beginning to give way. Finally.</p> </blockquote> <p>When credibility in central bank omnipotence snaps, buckle up. Risk will get&nbsp;re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.</p> <p>In&nbsp;<a href="" target="_blank">The Consequences Playbook</a>&nbsp;<em>(free executive summary;&nbsp;<a href="" target="_blank">enrollment&nbsp;</a>required for full access)&nbsp;</em>we spell out what will happen next and how you should be preparing today for what might happen tomorrow. If you haven&#39;t yet read it, you really should. Suffice it to say, a tremendous amount of wealth will be lost if (really,&nbsp;<em>when</em>) the central banks lose control. And standards of living for many will be impacted. A little preparation today can make a huge difference in your future.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="451" height="533" alt="" src="" /> </div> </div> </div> Behavioral Economics Bond Central Banks Chris Martenson Deficit Spending Demographics Equity Markets ETC Federal Reserve Great Depression Japan Meltdown Monetary Policy Neo-Keynesian Quantitative Easing Real estate Reality recovery Sat, 31 Jan 2015 20:45:52 +0000 Tyler Durden 501251 at Greek Social Contagion: Tens Of Thousands Rally In Support Of Spain's Anti-Austerity Podemos Party <p><a href="">Less than a week ago we warned, <em><strong>&quot;today Athens, tomorrow Madrid,&quot;</strong></em></a> and sure enough, emboldened by the success of Syriza in Greece, the people of Spain have turned out in their tens of thousands in Madrid at a demonstration called by the insurgent Spanish leftist party Podemos. <a href="">As The Independent reports,</a> <strong>Podemos, which means &quot;we can&quot;</strong>, has surged into <strong>first place in opinion polls</strong> in the few months since it was set up in the summer of 2014. It is now ahead of the centre-right Popular Party and centre-left Spanish Socialist Workers&rsquo; Party in many opinion polls. Podemos&rsquo;s policies include a universal basic income, increased democracy, crackdowns on tax avoidance, and increased public control over the economy. Most worrying for the status-quo huggers in Brussels, Podemos has also <strong>wants to reform the European Union, describing the current euro arrangement as a &quot;trap.&quot;</strong></p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 601px; height: 338px;" /></a></p> <p>&nbsp;</p> <p>As we noted earlier this week, while Alexis Tsipras name (and face) are now well known, we suspect few are yet fully aware of Pablo Iglesias, general secretary of Spain&#39;s left-wing Podemos party...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>Winds of democratic change are blowing in Europe.</strong></p> <p>&nbsp;</p> <p><strong>The change in Greece is called Syriza, in Spain it&rsquo;s called Podemos.</strong></p> <p>&nbsp;</p> <p><strong><a href=""><img height="291" src="" width="477" /></a></strong></p> <p>&nbsp;</p> <p>The Hope is coming.</p> <p>&nbsp;</p> <p>Hasta La Victoria. SYRIZA &ndash; PODEMOS &hellip; Venceremos! &rdquo; (Until victory &ndash; We will win!&ldquo;</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>And sure enough, here are the winds of social change...</p> <p><a href=""><img alt="" src="" style="width: 599px; height: 421px;" /></a></p> <p><img alt="" src="" style="width: 600px; height: 340px;" /></p> <p><a href=""><img alt="" src="" style="width: 599px; height: 223px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 400px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 401px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 400px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 400px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 338px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 338px;" /></a></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 400px;" /></a></p> <p>One marcher, Jose Maria Jacobo, told the Reuters news agency that&nbsp; Podemos supporters wanted to fight back against the country&rsquo;s political class.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>&quot;It is the only way to kick out all of those politicians who are taking everything from us. They even try to take our dignity away from us. But that they won&#39;t take that from us.&quot;</strong></u></p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p><a href=";sa=D&amp;sntz=1&amp;usg=AFQjCNEF_IXrfXhKKh3uEzfSRSVdKCMqaA"><em>As Bloomberg reports today,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Pablo Iglesias, the leader of Spanish anti-austerity party Podemos, <u><strong>pledged to restructure the nation&rsquo;s debt if he can convert his opinion-poll lead into election victory</strong></u>, following the example of his ally, Greek Prime Minister Alexis Tsipras. &ldquo;It has to be a rigorous restructuring,&rdquo; Iglesias, 36, told thousands of supporters at a rally in Madrid on Saturday. The deal &ldquo;should be appropriate for the fourth-largest euro economy,&rdquo; he added.</p> </blockquote> <p><strong>The party has also pledged to take on Spain&rsquo;s highly entrenched establishment, dubbed &ldquo;la casta&rdquo;, which has dominated politics in the country since the fall of fascism there.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1024" height="576" alt="" src="" /> </div> </div> </div> European Union Greece Reuters Sat, 31 Jan 2015 20:00:52 +0000 Tyler Durden 501250 at Market Calls Fed's Bluff - Desperation Becomes Palpable <p><a href=""><em>Submitted by Jeffrey Snider via Alhambra Investment Partners</em></a>,</p> <p><u><strong>Funding Markets just called The FOMC&#39;s bluff.</strong></u></p> <p><strong>Janet Yellen and her colleagues would like to welcome you, not unlike Tim Geithner&rsquo;s 2010 expedition in this area, to the recovery. </strong>They have removed pretty much all language that would make you think there was anything like lingering destructiveness or erosion. In doing so, they make it very plain that they want you to believe that they will be ending ZIRP, just as they have done to QE.</p> <p>There is the &ldquo;solid pace&rdquo; of economic expansion which has meant &ldquo;strong job gains&rdquo;, though, curiously, there won&rsquo;t be any of the mainstream &ldquo;inflation&rdquo; that usually accompanies this outlook. The world may be concerned about oil and all that, but the FOMC wants you to know that you should focus on them instead of such distractions.</p> <p><strong>Yet for all the supposed expertise and the &ldquo;best and brightest&rdquo; that sit upon the monetary throne in the US, funding markets just rejected everything the FOMC proclaimed.</strong> Knee-jerks are usually conforming, at least in some manner, but the eurodollar market, in particular, traded in the &ldquo;opposite&rdquo; direction of what you might expect had the FOMC left any impression.</p> <p><a href=""><img alt="ABOOK Jan 2015 Eurodollar Pre" class="aligncenter size-full wp-image-28131" height="321" src="" width="588" /></a></p> <p>The eurodollar curve has been more than suspicious about the Fed&rsquo;s preferred narrative for some time, going back to June, but you would at least think that this latest statement might&nbsp;carry enough weight as to cause the &ldquo;right&rdquo; direction if only in short-term trading. These markets are conditioned toward policy proclamations almost at face value (again, in the short run).</p> <p><strong>The path of &ldquo;projected&rdquo; rate changes&nbsp;has noticeably declined, which amounts to either a lower probability of actually getting to policy rate increases or a much diminished period of receiving them (the Fed does raise rates, but the economy isn&rsquo;t what they say and the asset bubbles cannot withstand the paradigm shift so that it all ends very badly once more). </strong>&nbsp;The inward, flattening of the eurodollar curve, which is supposed to be the closest &ldquo;market&rdquo; to funding rates, is a direct contradiction to the &ldquo;booming&rdquo; economy as spun by the economists and their models.</p> <p><a href=""><img alt="ABOOK Jan 2015 Eurodollar Post" class="aligncenter size-full wp-image-28130" height="321" src="" width="588" /></a></p> <p>I have rescaled the curve to zoom closer to the action so you can plainly see the intraday eurodollar curve moving in the opposite direction of any intended rate increases. And the majority of those&nbsp;movements are right in that central area of focus, the policy window from 2015-17.</p> <p><strong>These may not seem like large moves, but given the volume of contracts and the amount of &ldquo;money&rdquo; in the notional values there is a bit of exaggeration here.</strong> A 10 bps swing in a matter of a couple hours is significant, but very much so given that the &ldquo;money section&rdquo; of the funding curve not only dismisses the monetary policy statement in full, but actively trades <em>against</em> it. Eurodollars are essentially calling the FOMC&rsquo;s bluff.</p> <p><a href=""><img alt="ABOOK Jan 2015 Eurodollar Prices" class="aligncenter size-full wp-image-28129" height="341" src="" width="422" /></a></p> <p>I have said this pretty much since the beginning of the taper drama, that policymakers are acting out rational expectations theory or at least how they see it. <strong>In other words, their job is not to analyze actual economic conditions, but to condition economic thought toward the end goal.</strong> If they convince you that they believe the economy is on track they further believe you will act accordingly (&ldquo;you&rdquo; being both investor and economic agent). The more the economy diverges from the &ldquo;preferred&rdquo; projection, the more emphatic the cries of &ldquo;recovery&rdquo; become. <u><strong>At some point, desperation becomes palpable.</strong></u></p> <p>There are other factors to consider here, of course, but it is at least interesting as that seems to be theme guiding funding market trading here. <strong><u>The more the FOMC says the economy is great, the less credit markets seem to believe it &ndash; desperation rather than reality, now even to the shortest of timescale.</u></strong></p> <p>*&nbsp; *&nbsp; *</p> <p>NOTE: Things got even worse on Friday as the market really accelerated its bluff calling for The Fed...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 333px;" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="943" height="524" alt="" src="" /> </div> </div> </div> EuroDollar Janet Yellen Monetary Policy Monetary Policy Statement Reality recovery Tim Geithner Sat, 31 Jan 2015 19:17:49 +0000 Tyler Durden 501248 at DuMB AND DuMBKoPF... <p style="text-align: center;"><iframe src="" width="1024" height="768" frameborder="0"></iframe></p> Sat, 31 Jan 2015 18:49:29 +0000 williambanzai7 501247 at Did The Federal Reserve Make A Major Math Error When Reporting Its December Gold Withdrawals? <p>A month ago, <a href="">when we first observed the biggest monthly </a>gold repatriation from the NY Fed since 2001, when 47 tons of foreign-owned gold were withdrawn from the vault below 33 Liberty street which lowered the gold inside to just 6,029 tons, and which brought the 2014 YTD total withdrawal to 166.5 tons, we noted a math <em>anomaly</em> when accounting for the <a href="">previously reported 122 tons </a>of gold withdrawn by the Netherlands:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>net of the Netherlands withdrawals, there is some 44 tons of extra gold that has been also quietly redeemed (by another entity). The question is who: is it now the turn of Austria to reveal in a few weeks that it too, secretly, withdrew some 40+ tons of gold from "safe keeping" in the US? Or was it Belgium? Or did the Dutch simply decide to haul back some more. <strong>Or did Germany finally get over its "logistical complications" which prevented it from transporting more than just a laughable 5 tons in 2013? And most importantly, did Germany finally grow a pair and decide <a href="">not to let "diplomatic difficulties</a>" stand between it and its gold?</strong></p> </blockquote> <p>Ironically, less than three weeks later, our bolded speculation above was proven to be absolutely correct when <a href="">Germany confirmed </a>that not only had it resumed repatriating its gold from the NY Fed as originally announced two years ago, after the mere 5 tons of gold transported to Frankfurt in all of 2013, but had substantially picked up the pace, when on <a href="">January 19 the Bundesbank reported </a>that it had indeed "grown a pair" and repatriated 35 tonnes of gold from Paris and, more importantly, 85 tonnes of gold from the NY Fed in all of 2014.</p> <p>This is what <a href=";startpageAreaId=Teaserbereich&amp;startpageLinkName=2015_01_19_continues_transfers_of_gold+327534">Buba said</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The Bundesbank successfully continued and further stepped up its transfers of gold last year. <strong>In 2014, 120 tonnes of gold were transferred to Frankfurt am Main from storage locations abroad: 35 tonnes from Paris and 85 tonnes from New York. "Implementation of our new gold storage plan is proceeding smoothly. Operations are running very much according to schedule," said Carl-Ludwig Thiele, Member of the Executive Board of the Deutsche Bundesbank</strong>.</p> <p>&nbsp;</p> <p>The Bundesbank took advantage of the transfer from New York to have roughly 50 tonnes of gold melted down and recast according to the London Good Delivery standard, today's internationally recognised standard. "<strong>We also called on the expertise of the Bank for International Settlements for the spot checks that had to be carried out. As expected, there were no irregularities," </strong>said Mr Thiele.</p> <p>&nbsp;</p> <p>According to its new gold storage plan, unveiled in January 2013, the Bundesbank will be storing half of Germany’s gold reserves in its own vaults from 2020 onwards. This necessitates a phased transfer to Frankfurt am Main of 300 tonnes of gold from New York and all 374 tonnes of gold from Paris.</p> <p>&nbsp;</p> <p>Since the transfers began in 2013, the Bank has relocated a total of 157 tonnes of gold to Frankfurt am Main - 67 tonnes from Paris and 90 tonnes from New York. This is equivalent to roughly 23% of the total quantity to be transferred. The following table gives an overview of the gold that has been transferred to date.</p> <p>&nbsp;</p> <p><a href=""><img src="" width="563" height="335" /></a></p> <p>&nbsp;</p> <p>As at 31 December 2014, the Bundesbank's gold reserves were stored at the following locations.</p> <p>&nbsp;</p> <p><a href=""><img src="" width="563" height="239" /></a></p> </blockquote> <p>&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The Bundesbank assures the identity and authenticity of German gold reserves throughout the transfer process - from when they are removed from warehouses abroad until they are stored in Frankfurt am Main.</strong> As soon as the gold was removed from the warehouse locations abroad, <strong>Bundesbank employees cross-checked the lists of bars belonging to the Bundesbank against the information on the bars removed</strong>. Finally, once they arrived in Frankfurt am Main, all the transferred gold bars were thoroughly and exhaustively inspected and verified by the Bundesbank. <strong>When all the inspections had been concluded, no irregularities came to light with regard to the authenticity, fineness and weight of the bars.</strong></p> </blockquote> <p>At the time we commented that there was "a curious amount of precautions and safeguards when transporting the "safe" and "untainted" gold held at the NY Fed to Frankfurt. Almost as if the Bundesbank, gasp, <em>did not trust the quality and content of the NY Fed-held gold, nor its well-meaning intentions."</em></p> <p>Judging by the latest disclosure by the NY Fed, Buba may have had good reason to be "<em>concerned"</em> about its gold at the Fed, because according to the Fed's latest update of "<a href="">earmarked gold" for December </a>there was yet another math <em>anomaly.</em></p> <p>Whereas in November, the cumulative total correctly hinted that there was more withdrawals than had been disclosed, the December 2014 total suggests that <strong>either the Fed just made an egregious math error, one costing literally about $1.1 billion, when keeping track of its entrusted physical gold, or someone is lying.</strong></p> <p>As a reminder, based on purely public information, between just the Netherlands' 122 tons of repatriated gold and the Bundesbank's 85 tons, at least 207 tons of gold were quietly withdrawn from the NY Fed in all of 2014. This is what the NY Fed <em><strong>should </strong></em>have reported in its December earmarked gold update delivered yesterday. It also means that the NY Fed <em><strong>should </strong></em>have reported some 40.5 tons of gold withdrawn in December, after reporting 166.5 tons of withdrawals for 2014 through November, for the math to make sense. Instead, according to Federal Reserve data, only $14 billion in earmarked gold was withdrawn in December, bringing the total down to $8,170 billion, or 6,019 tons.</p> <p>Translated into actual metal, this means that the Fed reported only 10.3 tons of gold withdrawals in the last month of the year, suggesting that there is a <em>quite substantial hole</em> of 30 tons in publicly withdrawn gold that, at least for the time being, is unaccounted for by the Fed.</p> <p><a href=""><img src="" width="600" height="426" /></a></p> <p>&nbsp;</p> <p>So what happened: did an intern input the Fed's gold redemptions figures for December, supposedly a <em>different </em>intern than the one who works at the IMF and who caused a <a href="">stir earlier this week </a>when the IMF, <em>allegedly </em>erroneously, reported that the Dutch - after secretly repatriating 122 tons of gold - had also bought 10 tons of gold in the open market for the first time in nearly a decade.</p> <p>Or perhaps some "other" bank, central or commercial, decided to offset the redemptions by the Netherlands and Germany, and inexplicably added 30 tons of gold in December? The question then becomes: "who" deposited said gold, especially when one considers that even the adjoining <a href="">JPM vault which is allegedly connected to the NY Fed by a tunnel</a>,&nbsp;<em>only </em>contains some 740K ounces of gold, or <a href="">about 23 tonnes</a>.</p> <p>Or is it simply that when it comes to accurately reporting the flows of physical gold, classical math is incapable of keeping track of the New Normal gold moves, and the Fed has decided that even when dealing with physical gold there is a "settlement" period?</p> <p>We will find out the answer for sure next month, when unless the Fed revises its 2014 numbers, or plugs the outstanding repatriation "hole" with a late January withdrawal, then a key question will emerge, namely: <strong>how can central banks report 2014 inflows of 207 tons from the NY Fed, while said NY Fed only reports 177 tons of outflows. </strong></p> <p>And no, the <em>GAAP vs non-GAAP </em>excuse won't work this time.</p> <p><em>Source: <a href="">Selected Foreign Official Assets Held at Federal Reserve Banks</a></em><a href=""></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="350" height="346" alt="" src="" /> </div> </div> </div> Belgium Central Banks Federal Reserve GAAP Germany Netherlands New Normal Sat, 31 Jan 2015 18:28:50 +0000 Tyler Durden 501246 at The Future of Medicine? Forget Private Doctor Appointments, Group Medical Visits are Coming <p><a href=""><em>Submitted by Mike Krieger via Liberty Blitzkrieg blog</em></a>,</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>According to the American Academy of Family Physicians, around 10 percent of family doctors already offer shared medical appointments,&nbsp;sessions that bring together a dozen or more patients with similar medical conditions to meet with a doctor for 90 minutes. With&nbsp;pressure from the government and insurers to&nbsp;bring down the cost of care&nbsp;while treating the&nbsp;increasing number of people&nbsp;with health insurance, patients can&nbsp;expect group visits to become more common.&nbsp;&ldquo;It&rsquo;s efficient.&nbsp;It&rsquo;s economical.</em></strong>&quot;</p> <p>&nbsp;</p> <p>&ndash; From the <em>Bloomberg</em> article:&nbsp;<a href="">Your Next Doctor&rsquo;s Visit Could Get Crowded</a></p> </blockquote> <p>Get ready, this is coming. While this trend was already happening before the passage of Obamacare, it&rsquo;s not hard to imagine that private medical consultations could soon be a thing of the past for your average American serf.</p> <p>Somehow I doubt members of Congress will be having group visits any time soon&hellip;</p> <p><a href="">From <em>Bloomberg</em></a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>In a typical doctor&rsquo;s visit,&nbsp;you wait around for a while, get your vitals checked, and spend a few minutes alone in a room with a&nbsp;physician. It&rsquo;s&nbsp;private and&nbsp;short. Some doctors, frustrated by&nbsp;a relentless schedule of&nbsp;15-minute, one-on-one visits, are experimenting with appointments that are neither.</em></p> <p>&nbsp;</p> <p><em>According to the American Academy of Family Physicians, around 10 percent of family doctors already offer shared medical appointments,&nbsp;sessions that bring together a dozen or more patients with similar medical conditions to meet with a doctor for 90 minutes. With&nbsp;pressure from the government and insurers to&nbsp;<a data-web-url="" href="">bring down the cost of care</a>&nbsp;while treating the&nbsp;<a data-web-url="" href="">increasing number of people</a>&nbsp;with health insurance, patients can&nbsp;expect group visits to become more common.&nbsp;&ldquo;It&rsquo;s efficient.&nbsp;It&rsquo;s economical.&nbsp;It&rsquo;s high-quality care when it&rsquo;s done right,&rdquo; says Edward Noffsinger, a California psychologist who created the model in the 1990s at Kaiser Permanente, the state&rsquo;s largest health maintenance organization (HMO). </em></p> <p>&nbsp;</p> <p><em><strong>In a group visit, exams and tests are still conducted privately, but patients discuss&nbsp;their ailments&nbsp;in front of the group.</strong> The theory is that each patient can learn from the others&rsquo; experience, and doctors get to have a longer, more relaxed discussion instead of&nbsp;hopscotching to three or four&nbsp;exam rooms in an hour.&nbsp;&ldquo;You have one appointment with 10&nbsp;observers,&rdquo; says&nbsp;Marianne Sumego, an internist at the Cleveland Clinic.<strong> &ldquo;Patients are really getting the equivalent of 10 visits.&rdquo;</strong></em></p> </blockquote> <p>They&rsquo;ve already started with the hedonics. Incredible.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>Here&rsquo;s what is clear: Seeing several patients at once can be good for&nbsp;harried doctors&rsquo; finances.</strong> <strong>In 90 minutes, a physician might be able to complete five or&nbsp;six one-on-one visits.</strong> A group visit could allow doctors to see double that number or more in the same time, and medical assistants or nurses can take care routine aspects of care&mdash;checking patients in, taking vital signs, writing refills of&nbsp;medication.</em></p> </blockquote> <p>Finally, the real reason for groups visits is revealed.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Often it takes a fair amount of&nbsp;promotion by doctors to get patients interested in&nbsp;exploring&nbsp;group appointments, which require them to sign privacy agreements.&nbsp;&ldquo;Patients have a lifetime of expecting a one-on-one visit,&rdquo; says Noffsinger. &ldquo;<strong>We&rsquo;re asking them to do something entirely different.&rdquo;</strong></em></p> </blockquote> <p>Yeah they&rsquo;re &ldquo;asking&rdquo; you&nbsp;now, but I suspect they&rsquo;ll be &ldquo;telling&rdquo; you faster than you can say free healthcare.</p> <p><u><strong>Never forget, group doctors visits are what happens to&nbsp;a society with an increased standard of living. Keep telling yourself that.</strong></u></p> <p>*&nbsp; *&nbsp; *</p> <p>For other healthcare related articles, see:</p> <p><em><a href="" rel="bookmark" title="Permanent Link to Yep, You Guessed It – Obamacare Website Funneling Private Consumer Info to Private Companies">Yep, You Guessed It &ndash; Obamacare Website Funneling Private Consumer Info to Private Companies</a></em></p> <p><em><a href="" rel="bookmark" title="Permanent Link to Video of the Day – Obamacare Architect Credits “Lack of Transparency” and “Stupidity of the American People” for Passage of Healthcare Law">Video of the Day &ndash; Obamacare Architect Credits &ldquo;Lack of Transparency&rdquo; and &ldquo;Stupidity of the American People&rdquo; for Passage of Healthcare Law</a></em></p> <p><em><a href="" rel="bookmark" title="Permanent Link to ObamaFraud: GAO Study Finds Almost All Fake Applicants are Approved for Subsidized ObamaCare">ObamaFraud: GAO Study Finds Almost All Fake Applicants are Approved for Subsidized ObamaCare</a></em></p> <p><em><a href="" rel="bookmark" title="Permanent Link to Computer Security Expert Claims he Hacked the ObamaCare Website in 4 Minutes">Computer Security Expert Claims he Hacked the ObamaCare Website in 4 Minutes</a></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="293" height="300" alt="" src="" /> </div> </div> </div> Obamacare Transparency Sat, 31 Jan 2015 17:44:59 +0000 Tyler Durden 501245 at Caught On Tape: Dijsselbloem To Varoufakis: "You Just Killed Troika" <p>Amid &#39;turmoiling&#39; stock markets on Friday, CNBC&#39;s Simon Hobbs summed up the status quo&#39;s thinking on the new Greek leadership when he noted, somewhat angrily and shocked, <strong><em>&quot;The Greeks are not even trying to reassure the markets,&quot;</em></strong> seeming to have entirely forgotten <em>(and who can blame him in this new normal the world has been force-fed for 6 years)</em> that political leaders are elected for the good of the people (by the people) not for the markets. Yesterday saw the clearest example yet of Europe&#39;s anger that the Greeks may choose their own path as opposed to following the EU&#39;s non-sovereign leadership&#39;s demands when the most uncomfortable moment ever caught on tape - the moment when <strong>Eurogroup chief Jeroen Dijsselbloem </strong><a href=""><em>(he of the &quot;template&quot; foot in mouth disease)</em></a> stood up at the end of the EU-Greece press conference,<strong> awkwardly shook hands with Greece&#39;s new finance minister, and whispered...&quot;you have just killed the Troika,&quot; to which Varoufakis responded... &quot;wow!&quot;</strong></p> <p>&nbsp;</p> <p><a href=""><em>As Keep Talking Greece reports</em></a>,</p> <p>The joint press conference was concluding, when Greek Finance Minister<strong> Yanis Varoufakis</strong> droped a last bombshell.&nbsp; <em><strong>&ldquo;&hellip;and with this if you want &ndash; and according to European Parliament &ndash; flimsily-constructed committee we have no aim to cooperate. Thank you.&rdquo;</strong></em> Varoufakis was referring to the famous Troika, the country&rsquo;s official creditors consisting of the European Union, the International Monetary Fund and the European Central Bank..</p> <p>After concluding with a &ldquo;Thank you&rdquo; Varoufakis gives the word to Eurogroup Chief <strong>Jeroen Dijsselbloem</strong>, who wants to hear the translation first. Then he takes off the ear phones, he stands up and sets to leave. An enforced-looking shaking of hands delays the&nbsp; departure of the Dutch FinMin.</p> <p>Dijsselbloem quickly whispers something to Varoufakis&rsquo; ear, he briefly replies back and the Eurogroup chief leaves the press conference hall as soon as it was possible.</p> <p><strong>Video: the Awkward Greek-Eurogroup Moment</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>&nbsp;</p> <p>The whole afternoon, Greek and international media were trying to find out <u><strong>&ldquo;What the hell did they two men said to each other!?&rdquo;</strong></u></p> <p><img alt="" src="" style="border-width: 0px; border-style: solid; width: 600px; height: 554px;" /></p> <p>&nbsp;</p> <p><em>Private Mega TV reported short before 9 pm on Friday.</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>Eurogroup chief whispered to Greek FinMin&rsquo;s&nbsp; ear &ldquo;You just killed the Troika&rdquo; and that Varoufakis replied with a simple &ldquo;WOW!&rdquo;</strong></u></p> </blockquote> <p>&nbsp;</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p><strong>Dijsselbloem</strong><em>: Whisper&hellip;whisper&hellip;</em></p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p><strong>Varoufakis:</strong> <em>Whisper&hellip;.</em></p> <p>&nbsp;</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p>Dijsselbloom slides his hand away</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p>Back remains Varoufakis with one palm open and the left hand stuck in his pocket &ndash; relaxed Greek style</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p>The two men talk for a couple of minutes with lips hidden from the cameras.</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p>Dijsselbloem leaves without turning back to watch his interlocutor.</p> <p><img alt="" src="" style="height: 400px; width: 600px;" /></p> <p>I don&rsquo;t quite understand why Dijsselbloem is sour. I&rsquo;m sure that Varoufakis told him the same things when they had their 2-hour face-to-face talks.</p> <p>Unless they were talking about <em>Gouda</em> and <em>Feta</em> and the Greek FinMin surprised him when he said at the press conference, that the <a href="" target="_blank">Greek government will not negotiate with the Troika.</a></p> <p><u><strong>And furthermore, why is he offended? He is chief of the Eurogroup, he does not represent the Troika&hellip;</strong></u></p> <p><u><strong>Most probably he was expecting a Yes-Man behavior like in the past with HOHOHO-jocker Jean-Claude Juncker, when he was Eurogroup head.</strong></u></p> <p><a href=""><img alt="juncker venizelos" class="alignnone size-full wp-image-32350" src="" style="width: 601px; height: 318px;" /></a></p> <p><strong><em>Juncker &ndash; FinMin Venizelos</em></strong></p> <p><a href=""><img alt="Juncker" class="alignnone size-full wp-image-15774" src="" style="width: 601px; height: 497px;" /></a></p> <p><strong><em>Juncker &ndash; Spanish FinMin</em></strong></p> <p>*&nbsp; *&nbsp; *</p> <p>Later that evening Yanis Varoufakis gave an excellent more in depth interview with BBC&#39;s Newsnight... to explain why Greece will not accept more debt from the EU...</p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="338" height="347" alt="" src="" /> </div> </div> </div> Creditors European Central Bank European Union Greece International Monetary Fund New Normal Sat, 31 Jan 2015 16:58:45 +0000 Tyler Durden 501244 at