http://www.zerohedge.com/fullrss2.xml en Where China Goes To Outsource Its Own Soaring Labor Costs http://www.zerohedge.com/news/2014-07-24/where-china-goes-outsource-its-own-soaring-labor-costs <p>30 years ago, the great outsourcing wave took millions of US low-skilled jobs and planted them right in the heart of China, which was about to undergo the fastest industrialization-commercialization-financialization experiment in history. $26 trillion in bank assets later, the world's biggest housing bubble, and a teetering financial system that every day depends on Beijing making the correct central-planning decision (of kicking the can one more day, of course) or else the biggest financial collapse in history will take place, all lubricated by years of inflation in everything and most certainly wages, and suddenly outsourcing jobs in China is not all that attractive.&nbsp; In fact, it has gotten so bad that China itself is now forced to outsource its own labor to cheaper offshore markets. Such as this one.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Ethiopian workers strolling through the parking lot of Huajian Shoes’ factory outside Addis Ababa last month chose the wrong day to leave their shirts untucked. Company President Zhang Huarong, just arrived on a visit from China, spotted them through the window, sprang up and ran outside. The former People’s Liberation Army soldier harangued them loudly in Chinese, tugging at one man’s aqua polo shirt and forcing another’s shirt into his pants. Nonplussed, the workers stood silently until the eruption subsided.</p> <p>&nbsp;</p> <p><strong>Shaping up a handful of employees is one small part of Zhang’s quest to profit from Huajian’s factory wages of about $40 a month -– less than 10 percent the level in China.</strong></p> <p>&nbsp;</p> <p>“Ethiopia is exactly like China 30 years ago,” said Zhang, 55, who quit the military in 1982 to make shoes from his home in Jiangxi province with three sewing machines and now supplies such brands as Nine West and Guess?. “The poor transportation infrastructure, lots of jobless people.” </p> </blockquote> <p>Reading the <a href="http://www.bloomberg.com/news/2014-07-22/ethiopia-becomes-china-s-china-in-search-for-cheap-labor.html">linked Bloomberg article</a>, it becomes quite clear that it is not at all surprising that China has picked Ethiopia as its place to outsource labor: while 30 years ago the Chinese leveraged dragon was only just starting to stir, then-Marxist Ethiopia which back was considered one of the poorest countries in Africa if not the world, was in the midst of a great famine. And while things in China have changed drastically since the 1980s, in Ethopia, and most other African countries, time has stood still, at least when it comes to wages. Which means that having effectively colonized Africa in the past 4 years, as we showed in 2012 with "<a href="http://www.zerohedge.com/news/beijing-conference-see-how-china-quietly-took-over-africa">The Beijing Conference": See How China Quietly Took Over Africa</a>, while the west was busy kicking its own can, bailing each other out and pretending its economy is solvent, China was busy setting up shop across all African nations with plans to do just what Zhang does now: hire an ultra cheap labor force now that China itself is becoming uncompetitive in the global labor landscape.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>A combination of cheap labor and electricity and a government striving to attract foreign investment makes Ethiopia more attractive than many other African nations, </strong>said Deborah Brautigam, author of “The Dragon’s Gift: The Real Story of China in Africa” and a professor of international development and comparative politics at Johns Hopkins University’s School of Advanced International Studies in Washington.</p> <p>&nbsp;</p> <p>“They are trying to establish conditions for transformation,” Brautigam said in a telephone interview. “It could become the China of Africa.”</p> <p>&nbsp;</p> <p>Huajian’s 3,500 workers in Ethiopia produced 2 million pairs of shoes last year. Located in one of the country’s first government-supported industrial zones, the factory began operating in January 2012, only three months after Zhang decided to invest. It became profitable in its first year and now earns $100,000 to $200,000 a month, he said, calling it an insufficient return that will rise as workers become better trained. </p> <p>&nbsp;</p> <p>Under bright fluorescent lights, amid the drone of machines, workers cut, glue, stitch and sew Marc Fisher brown leather boots bound for the U.S. Meanwhile, supervisors monitor quotas on whiteboards, giving small cash rewards to winning teams and criticism to those falling short.</p> <p>&nbsp;</p> <p><strong>Huajian Chairman Zhang Huarong said, “Ethiopia is exactly like China 30 years ago.”</strong></p> <p>&nbsp;</p> <p>China, Africa and global retailers all have stakes in whether Ethiopia and such countries as Tanzania, Rwanda and Senegal become viable production bases for labor-intensive products. Promoting trade, boosting employment and spurring investment are among the topics that will be discussed on August 4-6 at the first White House U.S.-Africa Leaders Summit in Washington.</p> </blockquote> <p>China may not have hit its second, urban Lewis point yet, but if Ethopia is any indication, labor conditions for the country that needs to create tens of millions of new jobs every year to preserve social stability may get complicated very fast.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>African nations have a compelling opportunity to seize a share of the about 80 million jobs that China will export as its manufacturers lose competitiveness</strong>, according to Justin Lin, a former World Bank chief economist who now is a professor of economics at Peking University. </p> </blockquote> <p>Here, instead of alienating the potential labor pool, China is keeping its options very open, and in fact welcomes the ability to outsource to a cheaper location: "Chinese Premier Li Keqiang and Ethiopian Prime Minister Hailemariam Desalegn, who met on May 4, backed the move of Chinese industries to Ethiopia. <strong>China is “supporting Ethiopia’s great vision to become Africa’s manufacturing powerhouse,” </strong>Hailemariam told reporters at a joint press conference in Addis Ababa."</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Ethiopia%20workers.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Ethiopia%20workers_0.jpg" width="600" height="400" /></a></p> <p>At the very bottom of it all: surging labor prices. Yes, in China.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Weaker consumer spending in the U.S. and Europe after the financial crisis prompted global retailers to hasten their search for lower-cost producers, said Helen Hai, head of China Africa Consulting Ltd. in Addis Ababa. She ran Huajian’s Ethiopia factory until July of last year.</p> <p>&nbsp;</p> <p>While China’s inland regions offered manufacturers a cheaper alternative to the export-linked coastal areas, rising costs and a limited pool of available workers now are undermining that appeal.</p> <p>&nbsp;</p> <p>Average factory pay in Henan, about 800 kilometers from the coast, rose 103 percent in the five years ended in September and 80 percent in Chongqing, 1,700 kilometers up the Yangtze River. In the same period, salaries rose 82.5 percent in Guangdong, where Huajian has its base in the city of Dongguan. </p> <p>&nbsp;</p> <p>Cost inflation in countries including China has prompted Hennes &amp; Mauritz AB, Europe’s second-biggest clothing retailer, to work with three suppliers in Ethiopia. The nation has “great potential” for production, H&amp;M head of sustainability Helma Helmersson said in an April interview.</p> <p>&nbsp;</p> <p><strong>China’s average manufacturing wage is 3,469 yuan ($560) per month. Pay at the Huajian factory ranges from the basic after-tax minimum of $30 a month to about twice that for supervisors. By contrast, average manufacturing wages in South Africa, Africa’s biggest manufacturer, are about $1,200.</strong> </p> </blockquote> <p>China is not the only one to have discovered what may be the world's last outsourcing diamond in the rough.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Signs of Ethiopia’s allure include factories outside Addis Ababa set up by leather goods maker Pittards Plc of the U.K. and Turkish textile manufacturer Ayka Tekstil. Foreign direct investment in the nation surged almost 250 percent to $953 million last year from the year before, according to estimates by the United Nations Conference on Trade and Development.</p> </blockquote> <p>But only China brings with it a certain "flare" to the work ethic it is trying to inculcate within the local population:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Zhang spends about half his time in Ethiopia, he says. During the visit last month, he spoke to about 200 uniformed Huajian supervisors, a mix of Ethiopians and Chinese, gathered in the parking lot. A giant plasma screen mirrored the crowd as Zhang hurried onto the stage.&nbsp; He berated those assembled for a lack of efficiency, then praised them for their loyalty to Huajian, his words translated into Amharic and Oromo. He ordered them to march on the spot, to turn left and to turn right, all chanting together in Chinese.</p> <p>&nbsp;</p> <p><strong>“One two one,” they chanted. “One two three four,” as they marched in step. Slogans followed: “Unite as one.” “Improvement together.” “Civilized and efficient.”</strong></p> <p>&nbsp;</p> <p>They sang the “Song of Huajian,” whose words urged “We Huajian people” to bravely move forward, to hold the banner of Huajian high and to “keep our business forever.” Chinese supervisors led the song, their Ethiopian colleagues stumbling over some words and struggling to keep up.</p> <p>&nbsp;</p> <p>Later, Zhang explained that he can’t be as tough on the staff as he would like. “Here the management cannot be too strong as there will be a problem with the culture,” he said via a translator. “<strong>In China you can be strong, but not here</strong>. The conditions here mean we have to show respect. On one hand we have to have strict requirements; on the other hand we have to take care of them. They have their own dignity. They may be poor but we have to respect their dignity.” </p> </blockquote> <p>What does a typical worker's day look like:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Taddelech Teshome, 24, said her day starts at 7:20 a.m. after her Chinese employers provide employees with a breakfast of bread and tea. When her morning shift ferrying shoes from the factory floor to the warehouse is over, she gets fed the national staple, sour bread, for lunch.<strong> After work, a Huajian bus takes her to nearby Debre Zeit, a town where she rents a room with her sister for $18 a month. </strong></p> <p>&nbsp;</p> <p>She came to Huajian just over a year ago from her home 165 kilometers away in Arsi region after her sister started at the factory.</p> <p>&nbsp;</p> <p>“<strong>The work is good because I pay my rent and I can look after myself</strong>,” she said, wearing an aqua Huajian polo shirt. “It’s transformed my life.” Taddelech said she wants to work for two more years at the plant and become a supervisor. <strong>She eventually aspires to build her own house.</strong></p> <p>&nbsp;</p> <p>With inflation at 8 percent -- down from 40 percent in July 2011 -– saving cash is tough. Mohammed al-Jaber, who earns $30 a month for gluing shoe linings eight hours a day six days a week, said he can add to his pay with perfect attendance each month -- a $7.50 bonus -- and overtime. Any extra gets sent home to his family in the Arsi region. </p> </blockquote> <p>As for higher level arrangements, the two countries are certain to get along: One appeal for China: Ethiopia follows a similar tightly controlled, state-heavy economic model. Opposition parties won only one out of 547 parliamentary seats at the last election in 2010. Ties are strong between the Communist Party of China and the Ethiopian Peoples’ Revolutionary Democratic Front: On July 10, Central Committee Political Bureau member Guo Jinlong visited Ethiopia and met with Prime Minister Hailemariam. The two pledged to enhance cooperation, the official Xinhua news agency said. </p> <p>Meanwhile, China is doing what the west was so efficient in its heyday: providing all the loans to fund this international expansion:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Ethiopia’s heavy public investment in infrastructure using credit from Chinese state banks promises to relieve some key bottlenecks. The Export-Import Bank of China is funding a railway from Addis Ababa to landlocked Ethiopia’s main port in neighboring Djibouti. Ethiopia lost its coastline when Eritrea became independent in 1993.</p> <p>The Chinese and Ethiopian governments also are investing in hydroelectric plants -- including what will be Africa’s largest, the domestically funded Grand Ethiopian Renaissance Dam on the Blue Nile -- that should increase Ethiopia’s power supply five-fold by 2020.</p> <p>&nbsp;</p> <p>That may help overcome obstacles including the supply of electricity and cumbersome customs and tax procedures. In May, a World Bank team went to visit a textile factory in the Eastern Industrial Zone, where the Huajian plant is located, and found they are faced with daily power outages lasting for hours, Ethiopia country director Guang Zhe Chen said. </p> </blockquote> <p>Perhaps the biggest shocker here is that while China was colonizing Africa, first with infrastructure, then with debt, and now with local labor, neither JPM nor Goldman did the same. Perhaps the US truly is losing it to China which managed in a decade to take over the continent without firing a single shot (the US does have a few drone bases in central Africa but they won't last). And even if the "west" tries to steal Africa from under China's nose, it is far too late&nbsp; now.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Rising Chinese wages that Zhang calls “an inevitable trend” are pushing Huajian to try to increase its workforce in Ethiopia to as many as 50,000 within eight years.&nbsp; A model of a planned new plant at the edge of Addis Ababa is displayed at the factory. The 126-hectare (341-acre) complex, partly financed by more than $300 million from Huajian, will include apartments for workers, a “forest resort” district and a technical university.</p> <p>&nbsp;</p> <p>At the gathering in the parking lot, after supervisors sang Huajian’s company song, Zhang dismissed the Ethiopian contingent. Then he continued haranguing the Chinese managers. To make his point that structure was needed to keep employees in focus, he thrust a broomstick toward them repeatedly, then toward the remote camera that was feeding to the plasma screen, the image blurring with each prod.</p> <p>&nbsp;</p> <p>Then he left the stage, laughing and raising a triumphant fist. </p> </blockquote> <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="800" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Ethiopia%20workers.jpg?1406247352" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/where-china-goes-outsource-its-own-soaring-labor-costs#comments China Fisher Housing Bubble Renaissance White House World Bank Yuan Fri, 25 Jul 2014 02:27:16 +0000 Tyler Durden 491717 at http://www.zerohedge.com The "Insider Threat Program" And The Government's War On Whistleblowers http://www.zerohedge.com/news/2014-07-24/insider-threat-program-and-governments-war-whistleblowers <p><em>Submitted by <a href="http://libertyblitzkrieg.com/2014/07/24/the-insider-threat-program-and-the-governments-war-on-whistleblowers/">Michael Krieger of Liberty Blitzkrieg blog</a>,</em></p> <p>The Obama Administration&rsquo;s Orwellian government employee snitch network, dubbed the &ldquo;Insider Threat Program,&rdquo; first made headlines about a year ago. I found it to be so disturbingly significant I wrote a post about&nbsp;it titled:&nbsp;<strong><a href="http://libertyblitzkrieg.com/2013/07/11/the-3-key-takeaways-from-the-ridiculous-insider-threat-program/">The 3 Key Takeaways from the Ridiculous &ldquo;Insider Threat Program.&rdquo;</a>&nbsp;</strong>Those 3 key takeaways were that it&hellip;</p> <ol> <li>Creates a horrible and counterproductive work environment where everyone distrusts everyone else.</li> <li>Solidifies the fact the government is not interested in solving problems, but rather is focused on continuing the cronyism and criminality and merely covering it up.</li> <li>Exposes how completely hopeless and terminal the status quo is.</li> </ol> <p>Fast forward a year, and it appears that several members of Congress are also becoming increasingly concerned. Some are starting to ask questions, but as usual, the &ldquo;most transparent administration in history&rdquo; is entirely nontransparent. We learn from the <em>Washington Post</em> that:</p> <div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p><em>In early April, Sen. Charles E. Grassley summoned FBI officials to his Capitol Hill office. He said he wanted them to explain how a program designed to uncover internal security threats would at the same time protect whistleblowers who wanted to report wrongdoing within the bureau.</em></p> <p>&nbsp;</p> <p><em><strong>The meeting with two FBI officials, including the chief of the bureau&rsquo;s Insider Threat Program, ended almost as soon as it began.</strong> The officials said the FBI would protect whistleblowers by &ldquo;registering&rdquo; them. When Grassley&rsquo;s staff members asked them to elaborate, the <strong>FBI officials declined to answer any more questions and headed for the door.</strong></em></p> <p>&nbsp;</p> <p><em>&ldquo;We&rsquo;re leaving,&rdquo; said J. Christopher McDonough, an FBI agent assigned to the bureau&rsquo;s congressional affairs office, said Senate staff members who attended the meeting.</em></p> <p>&nbsp;</p> <p><em>The episode infuriated Grassley (Iowa),&nbsp;<a href="http://www.washingtonpost.com/blogs/federal-eye/wp/2014/04/10/sen-charles-grassley-plans-new-whistleblower-protection-caucus/">a leading advocate for whistleblowers</a>&nbsp;in Congress and the ranking Republican on the Senate Judiciary Committee. Any effort to register whistleblowers, he said, would &ldquo;clearly put a target on their backs.&rdquo;</em></p> <div> <p>&nbsp;</p> <p><em>The Insider Threat Program and a continuous monitoring initiative under consideration in the intelligence community were begun by the Obama administration after the leaks of classified information by former NSA contractor&nbsp;<a href="http://www.washingtonpost.com/world/national-security/nsa-secrets/">Edward Snowden</a>&nbsp;and Army Pvt.&nbsp;<a href="http://www.washingtonpost.com/world/national-security/judge-to-sentence-bradley-manning-today/2013/08/20/85bee184-09d0-11e3-b87c-476db8ac34cd_story.html">Chelsea Manning</a>, and the Navy Yard shootings by&nbsp;<a href="http://www.washingtonpost.com/local/crime/fbi-police-detail-shooting-navy-yard-shooting/2013/09/25/ee321abe-2600-11e3-b3e9-d97fb087acd6_story.html">Aaron Alexis,</a>&nbsp;who used his security clearance to gain access to the base.</em></p> </div> <p>&nbsp;</p> <p><em>The programs are designed to prevent leaks of classified information by monitoring government computers and employees&rsquo; behavior.</em></p> <p>&nbsp;</p> <p><strong><em>Grassley said the episode with the FBI illustrates how federal agencies are setting up internal security programs without giving careful consideration to whether they could dissuade whistleblowers from coming forward.</em></strong></p> <div> <p>&nbsp;</p> <p><em>&ldquo;The Insider Threat Program has the potential for taking the legs out from underneath all of the whistleblower protections we have,&rdquo; Grassley said in a recent interview.</em></p> <p>&nbsp;</p> <p><em><strong>Greg Klein, the head of the FBI&rsquo;s Insider Threat Program, and McDonough, the congressional affairs agent, did not return calls seeking comment.</strong> An FBI spokesman said the bureau does not plan to register whistleblowers. <strong>He said there was a misunderstanding about the nature of the briefing with staff members for Grassley,</strong> Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) and a law enforcement official who is assigned to the Senate panel. The spokesman noted that the FBI has a whistleblower training program for employees and a whistleblower protection office.</em></p> </div> </blockquote> </div> <p>Of course not. Why would a federal police force have to answer to Congress or the media? It&rsquo;s not like this is a democracy or anything.</p> <p>Furthermore, of course there was a &ldquo;misunderstanding,&rdquo; your representatives stormed out of the meeting like petulant toddlers.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><div> <p><em>Grassley is part of a growing chorus of lawmakers on Capitol Hill and attorneys for whistleblowers who warn that the&nbsp;<a href="http://www.washingtonpost.com/business/economy/federal-agencies-embrace-new-technology-and-strategies-to-find-the-enemy-within/2014/03/07/22ce335e-9d87-11e3-9ba6-800d1192d08b_story.html">Insider Threat Program</a>&nbsp;and the potential intelligence community initiative threaten to undermine federal workers&rsquo; ability to report wrongdoing without retaliation.</em></p> <p>&nbsp;</p> <p><strong><em>Together, the programs cover millions of federal workers and contractors at every government agency.</em></strong></p> <p>&nbsp;</p> <p><em>&ldquo;I think it&rsquo;s time to put up the caution light here,&rdquo; said&nbsp;<a href="http://www.washingtonpost.com/politics/after-years-of-obscure-warnings-wyden-gets-sought-after-privacy-debate-in-wake-of-nsa-revelations/2013/07/28/267efd1a-f573-11e2-861b-70461cc1cd24_story.html">Sen. Ron Wyden</a>&nbsp;(D-Ore.), a member of the Senate Intelligence Committee.</em></p> </div> <div> <p>&nbsp;</p> <p><em>&ldquo;This really has the potential for abuse, and I think it could have a chilling effect on the public&rsquo;s right to know and effective oversight of our government,&rdquo; Wyden said.</em></p> </div> <div> <p>&nbsp;</p> <p><strong><em>Michael German, a former undercover FBI agent and whistleblower, called the Insider Threat Program a &ldquo;dangerous&rdquo; initiative.</em></strong></p> </div> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;These agencies have long treated whistleblowers as security threats and this makes things even worse,&rdquo; said German, now a senior national security fellow at the Brennan Center for Justice at New York University School of Law.</em></p> </blockquote> <p>As I have maintained time and time again, <strong>what is clear since the Edward Snowden revelations is that the government has zero interest in reining in these programs.</strong> It&nbsp;merely wants to make sure the public can never learn about government criminality in the future. Hence the aggressive &ldquo;war on whistleblowers.&rdquo;</p> <p>Full article <a href="http://www.washingtonpost.com/world/national-security/intelligence-security-initiatives-have-chilling-effect-on-federal-whistleblowers-critics-say/2014/07/23/c9dfd794-0ea0-11e4-8341-b8072b1e7348_story.html">here</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="287" height="223" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_whistle.jpg?1406250120" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/insider-threat-program-and-governments-war-whistleblowers#comments Cronyism FBI headlines national security Obama Administration Fri, 25 Jul 2014 02:16:37 +0000 Tyler Durden 491721 at http://www.zerohedge.com You Know It's The New Normal When... http://www.zerohedge.com/news/2014-07-24/you-know-its-new-normal-when <p>The housing market is once again rapidly cooling off, as the fourth dead cat bounce of the artificial, centrally-planned "recovery" of the last 5 years takes hold (nowhere more visibly than in Phoenix whose "<a href="http://www.zerohedge.com/news/2014-07-14/phoenix-housing-market-hit-unprecedented-plunge-demand">Housing market has been hit an unprecedented plunge in demand</a>") but it wouldn't be the New Normal in which the middle class is evaporating at an unprecedented pace in order to make the uber rich uber-richer, if it wasn't for stories <a href="http://www.bloomberg.com/news/2014-07-24/hamptons-home-sales-rise-as-buyers-find-more-inventory.html">such as this about </a>one particular real estate market: that favorite haunt of the 0.001%, the Hamptons:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A separate report from the Corcoran Group showed that luxury sales by dollar volume rose 11 percent in the second quarter. Susan Breitenbach, a Corcoran broker who worked with Folise, <strong>said she has $200 million in sales and contracts so far this year</strong>, on pace to eclipse her typical yearly volume of $250 million.</p> <p>&nbsp;</p> <p>Tim Davis, another Corcoran broker, recently sold Wooldon Manor, a 14.5-acre (6-hectare) estate in Southampton, in two parcels for a combined $80 million. The seller was Scott Bommer, president of hedge fund SAB Capital Management LP, <strong>who paid $75 million for the oceanfront property in December</strong>.</p> </blockquote> <p>A mere $5 million in 6 months? What bubble...</p> <p>But wait, there's more, and this one is even more to the point:</p> <ul> <li><strong>CHUBB HAS SEEN UPTICK IN YACHT PURCHASING, MEGA-YACHT BUSINESS</strong></li> </ul> <p>Maybe Obama can explain to Steve Liesman once again just how the recovery is trickling down to the ordinary American simply because the market is hitting new all time highs on a daily basis.</p> <p>Actually, in retrospect, there nothing "new" about this "new" normal at all, or rather, abnormal.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/great%20gatsby.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/great%20gatsby_0.jpg" width="500" height="333" /></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="1200" height="798" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/great%20gatsby.jpg?1406252543" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/you-know-its-new-normal-when#comments Housing Market New Normal Real estate recovery Steve Liesman Fri, 25 Jul 2014 01:43:56 +0000 Tyler Durden 491720 at http://www.zerohedge.com America The Divided: Everyone Knows We Have Problems But There Is Very Little Agreement On Solutions http://www.zerohedge.com/news/2014-07-24/america-divided-everyone-knows-we-have-problems-there-very-little-agreement-solution <p><em>Submitted by Michael Snyder of <a href="http://theeconomiccollapseblog.com/archives/america-the-divided-everyone-knows-we-have-problems-but-there-is-very-little-agreement-on-solutions">The Economic Collapse blog</a>,</em></p> <p><strong>A house divided against itself will surely fall.&nbsp;</strong> America is more divided today than it has been in decades, and the deep divisions that are tearing us apart continue to get even worse.&nbsp; In fact, a newly released Rasmussen Reports national survey discovered tha<strong>t <a href="http://themostimportantnews.com/archives/67-percent-of-voters-say-america-is-a-more-divided-nation-than-it-was-four-years-ago" target="_blank" title="67 percent">67 percent</a> of voters believe that America is even more divided now than it was four years ago.&nbsp; </strong>We are angry, we are frustrated and we love to fight with one another, but none of this strife and discord is getting us anywhere.&nbsp; What most Americans can agree on is that we are facing tremendous problems as a nation.&nbsp; One average of recent polls found that only <a href="http://www.realclearpolitics.com/epolls/other/direction_of_country-902.html" target="_blank" title="26 percent">26 percent</a> of Americans believe that this country is heading in the right direction and <a href="http://www.realclearpolitics.com/epolls/other/direction_of_country-902.html" target="_blank" title="63.8 percent">63.8 percent</a> of Americans believe that this country is heading in the wrong direction.</p> <p><strong>Unfortunately, there is very little agreement on what the solutions to our problems are.&nbsp; </strong>That is where the division is.&nbsp; As a nation, we no longer have a shared set of values or principles that provides a foundation for our decisions.&nbsp; Everyone just kind of does whatever is right in their own eyes, and the result is chaos.&nbsp; At a minimum, the U.S. Constitution was supposed to bond all of us together, but it has become clear that very few of our lawless politicians have any respect for that document at this point.&nbsp; And the American people must not have too much respect left for the Constitution either, because they keep sending the very same politicians back to Washington over and over again.&nbsp; Unless a miracle happens, everyone is going to keep pulling in different directions, and that is going to continue ripping our country to shreds.</p> <p><strong>The issues that divide us are countless.&nbsp; The following are just a few examples...</strong></p> <p>-Illegal Immigration</p> <p>-Taxes</p> <p>-Obamacare</p> <p>-Government Debt</p> <p>-U.S. Military Intervention In Foreign Countries</p> <p>-Gay Marriage</p> <p>-Abortion</p> <p>-Racial Relations</p> <p>-Unemployment</p> <p>-Shipping Our Jobs Overseas</p> <p>-Cost Of Living/Inflation</p> <p>-The Gap Between The Wealthy And The Poor</p> <p>-Social Security/Medicare/Entitlements</p> <p>-The Size And Role Of Government</p> <p>-Welfare</p> <p>-Political Correctness</p> <p>-Sexual Morality</p> <p>-Global Warming/Climate Change</p> <p>-Guns/Gun Control</p> <p>-Common Core</p> <p>-Corporate Corruption</p> <p>-Government Surveillance</p> <p>-The Emerging <a href="http://themostimportantnews.com/archives/30-signs-that-america-is-being-transformed-into-a-big-brother-police-state" target="_blank" title="Big Brother Police State">Big Brother Police State</a></p> <p>-The War On Drugs</p> <p>-The War On Terror</p> <p>-U.S. Relationship With Israel</p> <p>-The Role Of Faith In Society</p> <p>I could go on and on with this list, but I think that you get the point.</p> <p>If you pick just about any issue on that list, there are large numbers of Americans that want to take us one way and large numbers of Americans that want to take us exactly in the opposite direction.&nbsp; In many instances, both sides consider their opponents to be the epitome of evil.</p> <p>Sadly, the fights that take place among those that are supposed to be on the same side are often even more disturbing.&nbsp; Some of the most bitter fighting that I have ever witnessed has been between people that should be working together.&nbsp; In fact, it often seems like a lot of people would rather fight others in their own &quot;movement&quot; than do something constructive.</p> <p>And actually the establishment loves when we fight with one another.&nbsp; The more divided that we are, the easier we are to control.</p> <p>I am often asked if I think that there is any hope for a political solution in this country.</p> <p>I wish that I could be more optimistic when I answer, but as divided as this country is right now I see absolutely no hope for a political solution on the national level any time soon.</p> <p>Even though Darth Vader has a higher favorability rating <a href="http://themostimportantnews.com/archives/darth-vader-is-polling-higher-than-all-potential-2016-presidential-candidates" target="_blank" title="than any 2016 White House contenders">than any 2016 White House contenders</a>, it is inevitable that one of them (with the full backing of the elite) will be our next president.&nbsp; And even though a few incumbents will be knocked out of Congress in 2014 and 2016, history has shown us that incumbents typically <a href="https://www.opensecrets.org/bigpicture/reelect.php" target="_blank" title="have a victory rate of more than 80 percent in election after election">have a victory rate of more than 80 percent in election after election</a>.</p> <p>We keep sending the same jokers back to D.C. again and again and yet we continue to keep expecting different results.</p> <p>Are we insane or what?</p> <p>In a&nbsp;<a href="http://endoftheamericandream.com/archives/19-numbers-which-prove-that-americans-are-angrier-and-more-frustrated-than-ever" target="_blank" title="previous article">previous article</a>, I noted a whole bunch of other polls and surveys that show how dissatisfied the American people have become with our government...</p> <p><strong>#1</strong>&nbsp;<a href="http://www.gallup.com/poll/166985/dissatisfied-gov-system-works.aspx" target="_blank" title="65 percent">65 percent</a> of Americans are dissatisfied &ldquo;with the U.S. system of government and its effectiveness&rdquo;.&nbsp; That is the highest level of dissatisfaction that Gallup has ever recorded.</p> <p><strong>#2</strong>&nbsp;<a href="http://www.gallup.com/poll/166985/dissatisfied-gov-system-works.aspx" target="_blank" title="66 percent">66 percent</a> of Americans are dissatisfied &ldquo;with the size and power of federal government&rdquo;.</p> <p><strong>#3</strong>&nbsp;<a href="http://www.prisonplanet.com/70-of-americans-have-no-faith-in-government.html" target="_blank" title="70 percent">70 percent</a> of Americans do not have confidence that the government will &ldquo;make progress on the important problems and issues facing the country in 2014.&rdquo;</p> <p><strong>#4</strong> Only <a href="http://www.rasmussenreports.com/public_content/politics/mood_of_america/congressional_performance" target="_blank" title="8 percent">8 percent</a> of Americans believe that Congress is doing a &ldquo;good&rdquo; or &ldquo;excellent&rdquo; job.</p> <p><strong>#5</strong> Only <a href="http://www.usatoday.com/story/news/politics/2013/10/21/usa-today-poll-shutdown-boost-for-democrats-bane-for-gop/3143281/" target="_blank" title="4 percent">4 percent</a> of Americans believe that it would &ldquo;change Congress for the worse&rdquo; if every member was voted out during the next election.</p> <p><strong>#6</strong> <a href="http://www.breakpoint.org/bpcommentaries/breakpoint-commentaries-archive/entry/13/24047" target="_blank" title="60 percent">60 percent</a> of Americans report feeling &ldquo;angry or irritable&rdquo;.&nbsp; Two years ago that number was at 50 percent.</p> <p><strong>#7</strong> <a href="http://www.quinnipiac.edu/institutes-and-centers/polling-institute/national/release-detail?ReleaseID=1999" target="_blank" title="53 percent">53 percent</a> of Americans believe that the Obama administration is &ldquo;not competent in running the government&rdquo;.</p> <p><strong>#8</strong> An all-time low <a href="http://www.gallup.com/poll/166763/record-high-americans-identify-independents.aspx" target="_blank" title="31 percent">31 percent</a> of Americans identify themselves as Democrats.</p> <p><strong>#9</strong> An all-time low <a href="http://www.gallup.com/poll/166763/record-high-americans-identify-independents.aspx" target="_blank" title="25 percent">25 percent</a> of Americans identify themselves as Republicans.</p> <p><strong>#10</strong> An all-time high <a href="http://www.gallup.com/poll/166763/record-high-americans-identify-independents.aspx" target="_blank" title="42 percent">42 percent</a> of Americans identify themselves as Independents.</p> <p>Clearly the American people are sick and tired of politics as usual.</p> <p>But even if we voted out every single member of Congress, who would we replace them with?</p> <p>That is where not having a shared set of values and principles comes into play.</p> <p>Even if we could start from scratch, the new politicians that the American people would send to Congress would not suddenly look like the founding fathers.</p> <p><strong>That is because we no longer believe in the same values and principles that they did.</strong></p> <p>Instead, an entirely new Congress would probably end up looking very much like the old Congress did.</p> <p>I wish that national unity was just as easy as saying something like this: &quot;Come on guys - let&#39;s all just get together and agree to do what is right for the country.&quot;</p> <p>That sounds really good, but what is right for the country?</p> <p><strong>In America today, there is very little agreement about what is right and wrong anymore.</strong></p> <p>And politically, it is hard enough to get a handful of people to agree on much of anything these days, much less the millions upon millions of people that would be required to form a viable political movement.</p> <p>So no, I don&#39;t believe that there will be a political solution on the national level any time soon.&nbsp; <strong><u>The government that we have already reflects what is in the hearts of the American people.</u></strong></p> <p>Until we start seeing hearts change on a widespread basis, we are not going to see any significant change in Washington.</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="284" height="287" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_div.jpg?1406237748" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/america-divided-everyone-knows-we-have-problems-there-very-little-agreement-solution#comments Bond Corruption Gallup Israel Medicare None Obama Administration White House Fri, 25 Jul 2014 01:21:10 +0000 Tyler Durden 491719 at http://www.zerohedge.com Food Inflation Watch: California Farmers' Water Costs Surge 700% After Government Cuts Supply http://www.zerohedge.com/news/2014-07-24/food-inflation-watch-california-farmers-water-costs-surge-700-after-government-cuts- <p>When <a href="http://www.zerohedge.com/news/2014-02-21/feds-withhold-water-california-farmers-first-time-54-years">we reported on the government's decisiosn to withhold irrigation water to California for the first time in 54 years</a>, we warned there would be consequences: <em>farmers are hit hardest as "<strong>they're all on pins and needles trying to figure out how they're going to get through this</strong>." Fields will go unplanted (supply lower mean food prices higher), or farmers will pay top dollar for water that's on the market (and those costs can only be passed on via higher food prices).</em> Sure enough, as Bloomberg reports, <strong>farmers in California’s Central Valley, the world’s most productive agricultural region, are <span style="text-decoration: underline;">paying as much as 10 times more</span> for water than they did before the state’s record drought cut supply</strong>.</p> <p>&nbsp;</p> <p><em>As Bloomberg Briefs' Alison Vekshin reports,</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><span style="text-decoration: underline;"><strong>Costs soared to $1,100 per acre-foot from $140 a year ago </strong></span>in the Fresno-based Westlands Water District, which represents 700 farms, said Gayle Holman, a spokeswoman. North of Sacramento, the Western Canal Water District is selling it for double the usual price: $500 per acre-foot, about 326,000 gallons.</p> <p>&nbsp;</p> <p><strong>The most severe water shortages are in the San Joaquin Valley</strong>, in an area from Bakersfield to Patterson and Chowchilla, said Mike Wade, executive director of the California Farm Water Coalition, a Sacramento-based group representing farmers and most agricultural irrigation districts in California.</p> <p><a href="http://www.zerohedge.com/news/2014-02-21/feds-withhold-water-california-farmers-first-time-54-years"><br /></a></p> <p><a href="http://www.zerohedge.com/news/2014-02-21/feds-withhold-water-california-farmers-first-time-54-years"></a><strong><a href="http://www.zerohedge.com/news/2014-02-21/feds-withhold-water-california-farmers-first-time-54-years">The drought gripping the state that supplies half the fruits, vegetables and nuts consumed in the U.S. has led federal and state providers to curtail the water they distribute to farmers.</a> </strong>That’s prompted districts representing growers to buy and sell for escalated prices from other parts of the state.</p> <p>&nbsp;</p> <p>The drought <span style="text-decoration: underline;"><strong>threatens to boost produce costs that are already elevated following a December frost</strong></span>, according to the U.S. Agriculture Department. The price of fresh fruit is forecast to rise as much as 6 percent this year, the department said last month.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>Dairy products, of which California is the biggest producer, may rise as much as 4 percent.</strong></span> After three years of record-low rainfall, 82 percent of the state is experiencing extreme drought, according to the U.S. Drought Monitor, a federal website.</p> <p>&nbsp;</p> <p><strong>The rising prices are “a function of supply and demand in a very dry year and the fact that there are a lot of competing uses for water in California,’’ </strong>said Mat Maucieri, a spokesman for the Bureau of Reclamation.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Seems like it's time for The Fed to print some more rain... </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="463" height="591" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_water.jpg?1406249440" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/food-inflation-watch-california-farmers-water-costs-surge-700-after-government-cuts-#comments Fri, 25 Jul 2014 00:50:43 +0000 Tyler Durden 491718 at http://www.zerohedge.com Japanese Inflation Holds Near 23 Year Highs As Food, Energy, & TV Costs Soar http://www.zerohedge.com/news/2014-07-24/japanese-inflation-holds-near-23-year-highs-food-energy-tv-costs-soar <p><strong>Japanese CPI printed 3.6% in June</strong>, modestly down from May's 3.7% YoY, but <strong>hotter than the expected</strong> 3.5% YoY analysts predicted. If you don't eat food or use energy then inflation merely bit 2.3% of your income this year but if you did then you may have noticed that <strong><span style="text-decoration: underline;">energy costs are 9.1% higher YoY, TVs +8.0%, and Food +4.1%</span></strong> (both showing no signs of making Japan's Misery Index any less, well, miserable). PPI also printed at 3.6% (23 year highs). So when the Japanese politicians say "Abenomics is well on its way to achieving its goals..." they must mean 'of <strong>lowering living standards for all Japanese people'</strong>.</p> <p>&nbsp;</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140724_cpi_0.jpg" width="600" height="297" /></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</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="955" height="472" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_cpi.jpg?1406245206" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/japanese-inflation-holds-near-23-year-highs-food-energy-tv-costs-soar#comments CPI Thu, 24 Jul 2014 23:39:43 +0000 Tyler Durden 491707 at http://www.zerohedge.com The Chart That Keeps Mario Draghi Up At Night http://www.zerohedge.com/news/2014-07-24/chart-keeps-mario-draghi-night <p>With peripheral European sovereign bond yields at or near record lows, no matter how much GDP gets downgraded (Italy), banking system collapses (Portugal), or loan losses surge (Spain); things must be great for borrowers, right? Wrong! And this is exactly what keeps Mario Draghi up at night... In fact, as the following dismal reality chart shows, <strong>real corporate lending spreads are at record highs...</strong> crushing the credit-created-growth dream of a European Renaissance.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140724_EU.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140724_EU_0.jpg" width="600" height="356" /></a></p> <p>&nbsp;</p> <p><a href="http://www.bloombergbriefs.com/economics/"><em>As Bloomberg Briefs' David Powell notes,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>One of the euro area’s greatest monetary problems is the large divergence in real corporate borrowing rates.</strong> For example, the spread between the real corporate borrowing rates in Portugal and Germany for loans over five years up to and including 1 million euros stood at 5.09 percentage points in May. The spreads versus Germany are 2.91 percentage points for Italy and 2.65 percentage points for Spain.</p> <p>&nbsp;</p> <p>Those spreads rise using the latest inflation figures, which are for June. They measure 5.39 percentage points for Portugal, 3.51 percentage points for Italy and 3.25 percentage points for Spain. The spreads on loans of that category are among the highest. That may be because they are mostly provided to small and medium-sized corporations.</p> </blockquote> <p>*&nbsp; *&nbsp; *<br />The bottom line is for these to improve, Draghi (or the ECB and thus the German taxpayers) will need to subsidize lending to SMEs in the periphery by a massive amount... the problem being, no one knows if there is even demand for this debt as the region deleverages in its balance sheet recession.</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="696" height="413" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_EU.jpg?1406239764" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/chart-keeps-mario-draghi-night#comments Balance Sheet Recession Bond Germany Italy Portugal Reality Recession Renaissance Thu, 24 Jul 2014 23:33:33 +0000 Tyler Durden 491706 at http://www.zerohedge.com CEO Of Russia's 2nd Largest Gold Producer Is "Horrified" At Market Manipulation http://www.zerohedge.com/news/2014-07-24/ceo-russias-2nd-largest-gold-producer-horrified-market-manipulation <p>The ongoing transition of <a href="http://www.zerohedge.com/news/2014-07-07/stunner-todays-round-table-debate-fix-london-gold-fix">gold price manipulation from conspiracy theory to conspiracy fact</a> just escalated as <a href="http://www.bloomberg.com/news/2014-07-22/hambro-horrified-by-tampering-of-london-gold-fix.html">Bloomberg reports</a>, Peter Hambro, chairman of Russia's 2nd largest gold producer Petropavlovsk Plc, said he was <a href="http://www.zerohedge.com/news/2013-11-25/how-gold-price-manipulated-during-london-fix"><strong>"horrified" by the manipulation of the London fix given its importance to the industry.</strong></a> One wonders just how many of <a href="http://www.zerohedge.com/news/2014-05-14/rothschild-koch-industries-meet-people-who-fix-price-gold">these individuals, involved in the manipulation, </a>Hambro is dinner-party friends with?</p> <p>&nbsp;</p> <p><a href="http://www.bloomberg.com/news/2014-07-22/hambro-horrified-by-tampering-of-london-gold-fix.html">As Bloomberg reports,</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“When I read the reports on what people had been doing to it, I was horrified,”</strong>Hambro said in an interview today. “It is something that is really important to people in the industry. It’s something that we use in a big way as we deliver our gold, that’s how we price.”</p> <p>&nbsp;</p> <p><strong>Barclays Plc was fined $44 million earlier this year after a trader sought to influence the gold fix in 2012.</strong> The gold fixing takes place twice a day by phone and is used by mining companies to central banks to trade or value the metal.</p> <p>&nbsp;</p> <p><strong>The banks conducting the century-old London gold fixing and the London Gold Market Fixing Ltd., which runs the procedure, are seeking to revamp the process</strong>. Deutsche Bank AG’s exit from the process this year as it scales back its commodities business left Societe Generale SA, Bank of Nova Scotia, HSBC Holdings Plc and Barclays to conduct fixings.</p> <p>&nbsp;</p> <p><strong>“To have something that we can rely on is vitally important,”</strong> said Hambro, who previously traded bullion at Marc Rich Group and Mocatta &amp; Goldsmid Ltd. “I look forward to its continuing existence.”</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>While we believe Hambro is right to be "horrified;" <a href="http://www.zerohedge.com/news/2014-02-28/gold-price-manipulated-decade-repeatedly-slammed-lower-bloomberg-reports"><em><strong>after 10 years of manipulation (downwards at least two-thirds of the time in six different years between 2004 and 2013. In 2010, large moves during the fix were negative 92 percent of the time)</strong></em></a>, we suspect he knew something was going on...</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="312" height="233" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140724_horror.jpg?1406239711" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/ceo-russias-2nd-largest-gold-producer-horrified-market-manipulation#comments Barclays Central Banks Deutsche Bank Market Manipulation Thu, 24 Jul 2014 23:04:14 +0000 Tyler Durden 491705 at http://www.zerohedge.com Europe – Here is What the Wealthy are Doing http://www.zerohedge.com/news/2014-07-24/europe-%E2%80%93-here-what-wealthy-are-doing <p style="text-align: left;"><span style="color: #800000;">By: Chris Tell</span><span style="color: #800000;">&nbsp;at:&nbsp;</span><a href="http://capitalistexploits.at/" style="text-align: left;">http://capitalistexploits.at/</a></p> <p><strong><em>There are essentially three main reasons for using Banks:</em></strong> </p> <ol> <li><strong><em> Storing cash for ease of transacting;</em></strong></li> <li><strong><em>Keeping cash safe from theft;</em></strong></li> <li><strong><em>Earning interest on your capital.</em></strong></li> </ol> <p> As a teenager I remember opening my first bank account, diligently saving my money and watching it slowly grow. Receiving "official" mail was cool. I felt important by simply receiving my monthly bank statements with my name on the envelope.</p> <p>I was confident that by banking my cash I was protecting my capital. After all, it seemed a better idea than sticking it in my sock drawer, and I soon found that I was earning interest on my money, something else my sock drawer couldn't provide. </p> <p> Little did I know or understand how modern banking actually worked back then, though it's only gotten worse since I opened that first bank account many years ago. Much worse, in fact.</p> <p>In Europe, Banks reserve ratios have literally collapsed, despite what the "stress tests" conducted by Eurocrats want us to believe. Passing a European Banking stress test these days is a little like farting - easy to do, mostly hot air, and yet it typically warns of something else coming down that isn't going to be pretty. And for those who see the writing on the wall, they know it stinks. </p> <p> As Reuters recently reported: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>European banks have a combined capital shortfall of about 84 billion euros ($115 billion), German weekly WirtschaftsWoche reported, citing a new study by the Organisation for Economic Cooperation and Development (OECD).</em> </p></blockquote> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em> French bank Credit Agricole has the deepest capital shortfall at 31.5 billion euros, while Deutsche Bank and Commerzbank have gaps of 19 billion and 7.7 billion respectively, the magazine reported in a pre-release of its Monday publication.</em></p></blockquote> <p> If you'd like your eyes to bleed, you're welcome to read the entire report <a href="http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ECO/WKP%282013%2994&amp;docLanguage=En">here</a>.</p> <p>It is no surprise that cash withdrawal limits are being implemented across Europe, and cash transactions of more than a fleeting amount are actually being banned. Yep, it is actually illegal to purchase anything over 1,000 Euro using cash.</p> <p>Want to have a big party night in Berlin? No problem. Go to the ATM and withdraw a couple hundred Euro in cash. If you're a central banker out for a taxpayer-funded soiree, (un)fortunately you'll have a problem, as you'll likely need to withdraw a few thousand Euro (hookers and blow aren't cheap). I wonder how they're going to pay for services rendered now? With a Visa card? </p> <p> It was only a few months back that <a href="http://www.bbc.com/news/business-25861717">HSBC were publicly humiliated</a> for restricting cash withdrawals by its customers. Now this is becoming commonplace across Europe. </p> <p> <strong>Why are they doing this?</strong> </p> <p> Two reasons: </p> <ol> <li>Bank runs are a real risk if the populace actually wakes up;</li> <li>Controlling the flow of money allows the controlling of people. Ensuring that transactions are all digital guarantees that financial privacy is vaporised.</li> </ol> <p> None of the above information is particularly enlightening for those paying attention. However, what is going on to combat this might raise a few eyebrows. I thought I'd relay a little story which came out of a conversation I had last week with a friend.</p> <p>Switzerland, once known for its robust banking privacy and healthy capital ratios, despite all of Europe's troubles, is still home to large pools of wealth. My friend maintains a relationship with an old banking&nbsp;colleague, who is currently working with fiduciaries in Switzerland to get client money out of their own bank accounts and into physical cash. These clients are no longer allowed to withdraw large amounts of cash, THEIR cash, directly from the banks any longer. However, they are free to wire funds anywhere they please.</p> <p>What is therefore happening is that the fiduciaries are wiring the money to Hong Kong, where it is picked up by a "messenger" and placed in an envelope to be couriered BACK to Switzerland, in cash. There are currently no restrictions on remitting cash into Switzerland. Right now a loophole exists, and these wealthy clients are moving many millions of dollars each week - wiring it out of the country only to have it sent back in cash. No doubt they're looking to put it in the sock drawer! What do they see that the man on the street doesn't?</p> <p>Remember the 3 reasons for using a bank account mentioned at the beginning of this article? </p> <ol> <li><strong>Storing cash for ease of transacting - </strong>This is still valid so long as you use the system.</li> <li><strong>Keeping cash safe from theft - </strong>The words "safe" and "bank", at least with most European banks that is, should not be used in the same sentence. Aside from the theft occurring on a daily basis by our central bankers, the risk to waking up one day to a nationalization of your European bank is a real and present risk.</li> <li><strong>Earning interest on your capital</strong></li> </ol> <p> Central bankers have single-handedly destroyed any incentive to place capital into the traditional banking system for yield. Anyone buying CDs thinking they're safe and that they provide a satisfactory return is simply delusional. </p> <p> - Chris </p> <p>&nbsp;</p> <p><em>"The Eurozone was never designed to cope with millions of Spaniards moving their money out of the country, behaving like middle-class Venezuelans with offshore accounts in Miami. And it also was never designed to cope with capital controls. But increasingly, it looks like we’re going to end up with one or the other. Or both." - </em>Felix Salmon</p> http://www.zerohedge.com/news/2014-07-24/europe-%E2%80%93-here-what-wealthy-are-doing#comments CDS Deutsche Bank Eurozone Felix Salmon Hong Kong Nationalization None Reuters Stress Test Switzerland Thu, 24 Jul 2014 22:55:57 +0000 Capitalist Exploits 491704 at http://www.zerohedge.com The Ten Plagues That Are Hitting America Right Now http://www.zerohedge.com/news/2014-07-24/ten-plagues-are-hitting-america-right-now <p><em>Submitted by <a href="http://endoftheamericandream.com/archives/the-ten-plagues-that-are-hitting-america-right-now?utm_source=feedly&amp;utm_reader=feedly&amp;utm_medium=rss&amp;utm_campaign=the-ten-plagues-that-are-hitting-america-right-now">Michael Snyder of The American Dream blog</a>,</em></p> <p>Why are so many plagues hitting the United States all of a sudden?&nbsp; Yes, one can always point out bad stuff that is happening somewhere in the country, but right now we are facing a nightmarish combination of crippling drought, devastating wildfires, disastrous viruses, dying crops and superbugs that scientists don&rsquo;t know how to kill.&nbsp; And as you will see, we even have a plague of flies down in Mississippi.&nbsp; So what in the world is going on?&nbsp;</p> <p>The following are ten plagues that are hitting America right now&hellip;</p> <p><strong>#1 The Plague Of Flies In The Upper Mississippi River Valley</strong></p> <p>This is perhaps the least dangerous plague, but it is also one of the most interesting.&nbsp; Just recently, a plague of flies was so thick in the upper Mississippi River valley&nbsp;<a href="http://themostimportantnews.com/archives/massive-plague-of-flies-in-the-upper-mississippi-river-valley" target="_blank" title="that it showed up on radar">that it showed up on radar</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The mayflies were detectable on radar around 845 pm and reports in the towns and cities began rolling in of the swarming and piles of mayflies. Numerous videos and pictures were circulating on social media, some of which are posted below as well.</p> <p>&nbsp;</p> <p>The radar detected the flies about 845 pm, emanating from the river (the source) with echo values similar to that of light-moderate rain (35-40 dBZ). With a general south-to-north wind flow above the surface, the mayflies quickly moved north once in the air. As the flies dispersed moving north-northeast, they also gained altitude with some of the echo being detected as far north as Black River Falls and as high as 2500 feet above ground.</p> <p>&nbsp;</p> <p>By late evening, mayflies were swarming in La Crosse, La Crescent, Stoddard and points up and down the river. While the emergence of mayflies from their river bottom mud dwelling can occur at various times through the warm season depending on the species, this particular emergence was that of the larger black/brown Bilineata species.</p> </blockquote> <p>Here is one photo of the flies that was posted by the federal government&hellip;</p> <p><a href="http://endoftheamericandream.com/archives/the-ten-plagues-that-are-hitting-america-right-now/plague-of-flies-in-mississippi-government-photo-public-domain" rel="attachment wp-att-4437"><img alt="Plague Of Flies In Mississippi - Government Photo Public Domain" class="aligncenter size-large wp-image-4437" height="460" src="http://endoftheamericandream.com/wp-content/uploads/2014/07/Plague-Of-Flies-In-Mississippi-Government-Photo-Public-Domain-460x460.jpg" width="460" /></a></p> <p><strong>#2 The Chikungunya Virus</strong></p> <p>As I wrote about <a href="http://endoftheamericandream.com/archives/possible-epidemic-the-chikungunya-virus-is-starting-to-spread-in-america" title="the other day">the other day</a>, down in Florida health officials have discovered the very first confirmed cases of the chikungunya virus to be transmitted locally.&nbsp; In other words, it is now being passed to people that have not even traveled out of the country.</p> <p>An epidemic of the virus has already been declared down in Puerto Rico, and authorities are deeply concerned about the possibility of one up here as well.</p> <p>Already, cases of the virus have been reported in 30 different states and the total number of cases in the U.S. is&nbsp;<a href="http://abcnews.go.com/Health/heck-chikungunya/story?id=24619611" target="_blank" title="357 reported cases">more than five times higher</a> than in any other recent year.</p> <p>If you live in an area that has a lot of mosquitos, you might want to be very, very careful right about now because this is a virus&nbsp;<a href="http://www.state-journal.com/spectrum/2014/07/19/health-mosquito-borne-virus-potentially-in-kentucky" target="_blank" title="for the rest of your life">that is exceedingly painful</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>With illness onset, the person develops high fever, chills, and joint pain, followed in some by a rash on the trunk, limbs and face lasting 3-4 days. Muscle and joint pain last about one week. Joint pain is often severe and in some people lasts longer, up to several months.</p> </blockquote> <p><strong>#3 The Wildfires Out West</strong></p> <p>The massive wildfires in Washington, Oregon and western Canada have spread clouds of smoke over vast areas of the northwest United States in recent days.&nbsp; The following excerpt comes from a recent&nbsp;<a href="http://www.cnn.com/2014/07/18/us/washington-wildfires/index.html?hpt=hp_t2" target="_blank" title="CNN report">CNN report</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Wildfires spanning almost 170,000 acres are driving hundreds of people from their homes in Washington state and across the border in Canada, officials said.</p> <p>&nbsp;</p> <p>Washington authorities say the fires surged overnight to 168,713 acres in the state. The flames have encroached on towns.</p> <p>&nbsp;</p> <p>Janet Pearce of the Washington state Department of Natural Resources said the four fires had not been contained as of Friday morning. An estimated 80 homes were destroyed and cell phone service was knocked out.</p> </blockquote> <p><strong>#4 The Drought In California</strong></p> <p>The nightmarish multi-year drought in the state of California just continues to get even worse.</p> <p>This week it was reported that&nbsp;<a href="http://themostimportantnews.com/archives/80-percent-of-california-is-now-in-extreme-drought" target="_blank" title="81 percent">81 percent</a> of California is now experiencing &ldquo;extreme drought&rdquo; or worse.</p> <p>Three months ago, that number was just 68 percent.</p> <p>And we are being told that downtown Los Angeles is now the driest that it has been since rain records began <a href="http://themostimportantnews.com/archives/downtown-l-a-is-now-the-driest-it-has-been-since-rain-records-started-in-1877" target="_blank" title="in 1877">in 1877</a>.</p> <p>For much, much more on this, please see my recent article entitled &ldquo;<a href="http://theeconomiccollapseblog.com/archives/20-signs-the-epic-drought-in-the-western-united-states-is-starting-to-become-apocalyptic" target="_blank" title="20 Signs The Epic Drought In The Western United States Is Starting To Become Apocalyptic">20 Signs The Epic Drought In The Western United States Is Starting To Become Apocalyptic</a>&ldquo;.</p> <p><strong>#5 The Virus That Has Killed Millions Of Our Pigs</strong></p> <p>A horrific pig virus known as porcine epidemic diarrhea came over from China a little over a year ago.</p> <p>Since then, it has killed about 7 million pigs, and <a href="http://themostimportantnews.com/archives/100000-pigs-are-dying-each-week-as-devastating-virus-plagues-pork-industry" target="_blank" title="approximately 100,000 more are dying each week">approximately 100,000 more are dying each week</a>.</p> <p><strong>#6 Citrus Greening</strong></p> <p>Have you ever heard of citrus greening disease?</p> <p>Perhaps not, but it has gotten so bad down in Florida that experts are now saying that the entire citrus industry in the state <a href="http://www.businessinsider.com/citrus-greening-destroying-orange-juice-2014-6" target="_blank" title="“could be destroyed”">&ldquo;could be destroyed&rdquo;</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;It&rsquo;s horrible &mdash; it&rsquo;s a disaster,&rdquo; says Fred Gmitter, a professor of horticulture science at the University of Florida Citrus Research and Education Center.</p> <p>&nbsp;</p> <p>It might be time to kiss your OJ goodbye, unless science steps in to save the day.</p> <p>&nbsp;</p> <p>At least 70% of Florida&rsquo;s citrus trees are already infected by the disease, known as citrus greening, huanglongbing, or occasionally just with an ominous &ldquo;it,&rdquo; as in &ldquo;<a href="http://www.nytimes.com/2013/07/28/science/a-race-to-save-the-orange-by-altering-its-dna.html" target="_blank" title="It’s here">It&rsquo;s here</a>.&rdquo;</p> <p>&nbsp;</p> <p>Florida&rsquo;s citrus crop this year is the <a href="http://abcnews.go.com/US/wireStory/apnewsbreak-federal-funds-citrus-greening-24105661" target="_blank" title="lowest it’s been in 30 years">lowest it&rsquo;s been in 30 years</a>, and agricultural authorities have <a href="http://www.nytimes.com/2014/06/13/business/us-allocates-31-5-million-to-aid-florida-citrus-industry.html" target="_blank" title="continued to lower">continued to lower</a> their production estimates. Orange-juice prices are <a href="http://www.reuters.com/article/2014/06/12/us-usda-citrus-disease-idUSKBN0EN1QY20140612" target="_blank" title="up nearly 20% this year alone">up nearly 20% this year alone</a>&nbsp;and will continue to rise. The disease was a major factor in the lime shortage that <a href="http://www.utsandiego.com/news/2014/Mar/18/lime-mexico-shortage-price-increase-tijuana/" target="_blank" title="made the price of a box">made the price of a box</a> of Persian limes jump from $18 to $85 last December. Prices could jump higher for oranges. Researchers and growers say that if a cure isn&rsquo;t found, the entire $9 billion Florida citrus industry <a href="http://www.washingtonpost.com/national/health-science/florida-citrus-growers-worry-that-deadly-bacteria-will-mean-end-of-orange-juice/2014/01/12/1391c470-7891-11e3-b1c5-739e63e9c9a7_story.html" target="_blank" title="could be destroyed">could be destroyed</a>.</p> </blockquote> <p><strong>#7 Bananas Going Extinct?</strong></p> <p>You bananas are not safe either.</p> <p>According to&nbsp;<a href="http://www.cnbc.com/id/101585189" target="_blank" title="CNBC article">CNBC</a>, the TR4 fungus is spreading so rapidly that it could eventually totally wipe out the variety of bananas that we find in our grocery stores today&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Banana lovers take note: The world&rsquo;s supply of the fruit is under attack from a fungus strain <strong>that could wipe out the popular variety that Americans eat</strong>.</p> <p>&nbsp;</p> <p>&ldquo;It&rsquo;s a very serious situation,&rdquo; said Randy Ploetz, a professor of plant pathology at the University of Florida who in 1989 originally discovered a strain of Panama disease, called TR4, that may be growing into a serious threat to U.S. supplies of the fruit and Latin American producers.</p> <p>&nbsp;</p> <p>&ldquo;There&rsquo;s nothing at this point that really keeps the fungus from spreading,&rdquo; he said in an interview with CNBC.</p> <p>&nbsp;</p> <p>While there are nearly 1,000 varieties of bananas, the most popular is the Cavendish, which accounts for 45 percent of the fruit&rsquo;s global crop&mdash;and the one Americans mostly find in their supermarkets.</p> </blockquote> <p><strong>#8 The Number Of Earthquakes Is Increasing</strong></p> <p>For a long time, scientists tried to deny that the number of earthquakes is increasing.</p> <p>But now, the USGS is finally admitting that the number of big earthquakes <a href="http://themostimportantnews.com/archives/big-earthquakes-double-in-2014-but-theyre-not-linked-say-scientists" target="_blank" title="has doubled">has doubled</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>If you think there have been more earthquakes than usual this year, you&rsquo;re right. A new study finds there were more than twice as many big earthquakes in the first quarter of 2014 as compared with the average since 1979.</p> <p>&nbsp;</p> <p>&ldquo;We have recently experienced a period that has had one of the highest rates of great earthquakes ever recorded,&rdquo; said lead study author Tom Parsons, a research geophysicist with the U.S. Geological Survey (USGS) in Menlo Park, California.</p> </blockquote> <p>Fortunately, most of the earthquakes in the U.S. so far this year have been relatively small or have been in isolated areas.</p> <p>But they have been popping up in very unusual areas (such as Oklahoma), and as seismic activity along the Ring of Fire <a href="http://thetruthwins.com/archives/scientists-assure-us-that-the-recent-earthquakes-on-the-ring-of-fire-are-not-related" target="_blank" title="continues to increase">continues to increase</a>, it is probably only a matter of time before one of our major cities gets hit with a major tragedy.</p> <p><strong>#9 Superbugs</strong></p> <p>Thanks at least in part to the massive overuse of antibiotics, a new generation of superbugs is arising.&nbsp; Scientists have no way to kill these superbugs, and according to experts they are finding their way&nbsp;<a href="http://www.naturalnews.com/046041_CRE_superbugs_drug-resistant_infections_modern_plague.html" target="_blank" title="“into healthcare facilities nationwide”">&ldquo;into healthcare facilities nationwide&rdquo;</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Drug-resistant superbug infections have reached near-epidemic levels across U.S. hospitals, with an alarming 500% increase now documented in a study just published in the August issue of <i>Infection Control and Hospital Epidemiology</i> (the journal of the <i>Society for Healthcare Epidemiology of America</i>).</p> <p>&nbsp;</p> <p>Lead author of the study, Dr. Joshua Thaden, warned &ldquo;This dangerous bacteria is finding its way into healthcare facilities nationwide&hellip; A CRE epidemic is fast approaching&hellip; Even this marked increase likely underestimates the true scope of the problem given variations in hospital surveillance practices.&rdquo;</p> <p>&nbsp;</p> <p>The study also found that an astonishing 94 percent of CRE infections were caused by healthcare activities or hospital procedures.</p> </blockquote> <p><strong>#10 Fukushima</strong></p> <p>The Fukushima nuclear disaster is the gift that just keeps on giving.</p> <p>Hundreds of tons of radioactive water are being released into the Pacific on a continual basis, and this could potentially affect our oceans and our food chain for generations to come.</p> <p>But it is a &ldquo;slow motion disaster&rdquo; that is already &ldquo;old news&rdquo;, so most Americans don&rsquo;t think about it anymore.&nbsp; But the truth is that there is a lot of evidence that it should be taken very seriously in this country.&nbsp; For much more on this, please see <a href="http://thetruthwins.com/archives/36-signs-the-media-is-lying-to-you-about-how-radiation-from-fukushima-is-affecting-the-west-coast" target="_blank" title="this article">this article</a>.</p> <p>In Japan, of course, things are even worse.</p> <p>In fact, one Japanese doctor that was working in Tokyo says that radiation sickness&nbsp;<a href="http://www.save-children-from-radiation.org/2014/07/16/a-tokyo-doctor-who-has-moved-to-western-japan-urges-fellow-doctors-to-promote-radiation-protection-a-message-from-dr-mita-to-his-colleagues-in-kodaira-city-t/" target="_blank" title="is rampant in that city">is rampant in that city</a>&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Since December 2011, I have conducted thyroid ultrasound examinations, thyroid function tests, general blood tests and biochemical tests on about 2000 people, mostly families in the Tokyo metropolitan area expressing concerns on the effects of radiation. I have observed that white blood cells, especially neutrophils, <strong>are decreasing among children under the age of 10</strong>. There are cases of significant decline in the number of neutrophils in 0-1 year-olds born after the earthquake (&lt;1000). In both cases, conditions tend to improve <strong>by moving to Western Japan</strong> (Neutrophils 0&ndash;&gt;4500). <strong>Patients report nosebleed, hair loss, lack of energy, subcutaneous bleeding, visible urinary hemorrhage, skin inflammations, coughs and various other non-specific symptoms</strong>.</p> </blockquote> <p>And this Japanese doctor believes that things are so dire that he says that the entire city of Tokyo should be evacuated&hellip;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Residents of Tokyo are unfortunately not in the position to pity the affected regions of Tohoku because they are victims themselves. Time is running short. I took an earlier step forward <strong>and evacuated to the west</strong>. My fellow doctors of medicine, I am waiting for you here. And to the people in Eastern Japan still hesitating, <strong>all my support goes to facilitating and enabling your evacuation, relocation, or a temporary relief in Western Japan</strong>.</p> </blockquote> <p>Just like with Chernobyl, this radioactive material is going to silently make people sick and kill people all over globe for years to come, and most of them will never have any idea what is really happening to them.</p> <p>*&nbsp; *&nbsp; *</p> <p>But apart from that all that... things are great.</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="359" height="357" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140723_end.jpg?1406237011" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-24/ten-plagues-are-hitting-america-right-now#comments China CRE CRE Florida Japan Oklahoma Puerto Rico Thu, 24 Jul 2014 22:30:09 +0000 Tyler Durden 491703 at http://www.zerohedge.com