http://www.zerohedge.com/fullrss2.xml/component/option%2Ccom_docman/Itemid%2C200023/gid%2C397/BoomBustBlog/BoomBustBlog/BoomBustBlog/BoomBustBlog/2009/2009/07/2009/2009/2009/07/2009/07/2009/2009/07/2009/2009/07/2009/2009/07/2009/2009/07/2009/2009/2009/07/2009/07/news/iran-releases-video-captured-us-drone en How Effective Have The Fed's QE Programs Been? http://www.zerohedge.com/news/2014-07-22/how-effective-have-feds-qe-programs-been <p><em>Submitted by <a href="http://streettalklive.com/index.php/daily-x-change/2310-how-effective-have-the-fed-s-qe-programs-been.html">Lance Roberts of STA Wealth Management</a>,</em></p> <div class="highslide-gallery"> <p>In <a href="http://streettalklive.com/index.php/newsletter/current-issue.html?archive=07-19-14">the most recent newsletter,</a> I discussed this year&#39;s rise in the markets and the fact that all of the gains have occurred during some of the historically weakest months of the year.&nbsp; I also noted a few interesting facts:</p> <ul> <li>100% of the year-to-date returns were contained within roughly 50% of trading weeks. <span style="color: #dc0000;"><em>(15 positive/14 negative weeks)</em></span></li> <li>78.5% of the year-to-date gains have occurred since May 20th.</li> <li>100% of the gains for the year have occurred since April.</li> </ul> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1newsletter/2014/071914/SP500-Chart-071914.PNG" target="_blank" title="SP500-Chart-071914"><img alt="SP500-Chart-071914" class="i_want_img5" src="http://streettalklive.com/images/1newsletter/2014/071914/SP500-Chart-071914.PNG" style="width: 600px; height: 267px;" /></a></p> <p><span style="color: black;">These gains have also come at a time when corporate profits are slowing; economic growth remains weak and geopolitical tensions have been on the rise. UBS published a research piece last week entitled &#39;<strong>We are worried&#39;</strong> which stated:</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><i><span style="color: #1f497d;">&ldquo;Firstly we are concerned about valuations. We show that equity markets are stretched <strong>(e.g., more than 80% of the S&amp;P rally since last year is due to re-rating)</strong>, but we also find that the fixed income market has become quite rich <strong>(we have been overweight European peripherals for more than a year on valuation grounds, we show that this argument no longer holds)</strong>, and the same is true of the credit market. </span></i></p> <p>&nbsp;</p> <p><i><span style="color: #1f497d;">Second, <strong>because capital has been flowing rapidly into risky assets</strong>, we document that argument and here too find evidence <strong>that the market might be ahead of itself. </strong>We read the market reaction last week to the Portuguese news as a sign that the <strong>market is indeed too complacent and could correct rapidly.&rdquo;</strong></span></i></p> </blockquote> <p>&nbsp;<a href="http://streettalklive.com/images/1newsletter/2014/071914/UBS-Chart1-071914.PNG" target="_blank" title="UBS-Chart1-071914"><img alt="UBS-Chart1-071914" src="http://streettalklive.com/images/1newsletter/2014/071914/UBS-Chart1-071914.PNG" style="width: 601px; height: 263px;" /></a></p> <p><span style="color: black;">The reason for the rise, of course, is the same as it has been seen 2009 which has been almost solely due to the Federal Reserve&rsquo;s ongoing liquidity injections into the financial markets. The chart below shows three things from the beginning of 2014:</span></p> <ol> <li><i><span style="color: black;">The S&amp;P 500</span></i></li> <li><i><span style="color: black;">The monthly NET changes to the Fed&rsquo;s balance sheet</span></i></li> <li><i><span style="color: black;">The cumulative changes to the Fed&rsquo;s balance sheet.</span></i></li> </ol> <p><span style="color: black;"><a href="http://streettalklive.com/images/1newsletter/2014/071914/Fed-Balance-Sheet-SP500-071914.PNG" target="_blank" title="Fed-Balance-Sheet-SP500-071914"><img alt="Fed-Balance-Sheet-SP500-071914" src="http://streettalklive.com/images/1newsletter/2014/071914/Fed-Balance-Sheet-SP500-071914.PNG" style="width: 601px; height: 348px;" /></a></span></p> <p>When it comes to the financial markets, Senator Chuck Grassley summed it up best by stating that the Federal Reserve was the <em>&quot;...only game in town.&quot; </em></p> <p>As shown in the chart below, every $1 of growth in the S&amp;P 500 index required just $1.89 of bond purchases.</p> <p><img alt="Fed-Balance-Sheet-SP500-071914-3" src="http://streettalklive.com/images/1newsletter/2014/071914/Fed-Balance-Sheet-SP500-071914-3.PNG" style="width: 601px; height: 321px;" /></p> <p>This inflation of asset prices by the Federal Reserve was a direct goal, rather than a byproduct, of the various monetary policies implemented since 2008.&nbsp; Ben Bernanke, in 2010 following the implementation of QE 2, wrote in an <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html">Op-ed for the Washington Post</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;<strong>...higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.</strong>&quot;</p> </blockquote> <p>It is quite clear that Bernanke achieved his goal of inflating asset prices by expanding the Federal Reserve&#39;s balance sheet by 371.64% since the end of the financial crisis. However, was he as successful in fulfilling his other objectives? The following charts perform the same cost/benefit analysis as shown above for each of the metrics that Bernanke detailed above.</p> <p><strong>Economic Growth</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1newsletter/2014/071914/Fed-Balance-Sheet-GDP-071914-4.PNG" target="_blank" title="Fed-Balance-Sheet-GDP-071914-4"><img alt="Fed-Balance-Sheet-GDP-071914-4" class="i_want_img5" src="http://streettalklive.com/images/1newsletter/2014/071914/Fed-Balance-Sheet-GDP-071914-4.PNG" style="width: 601px; height: 321px;" /></a></p> <p><strong>Consumer Confidence</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Sentiment-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-Sentiment-072114"><img alt="Fed-Balance-Sheet-vs-Sentiment-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Sentiment-072114.PNG" style="width: 600px; height: 319px;" /></a></p> <p><strong>Consumer Spending</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Spending-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-Spending-072114"><img alt="Fed-Balance-Sheet-vs-Spending-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Spending-072114.PNG" style="width: 600px; height: 319px;" /></a></p> <p><strong>Corporate Investment</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Investment-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-Investment-072114"><img alt="Fed-Balance-Sheet-vs-Investment-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Investment-072114.PNG" style="width: 600px; height: 319px;" /></a></p> <p><strong>Corporate Profits</strong></p> <p><strong><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Profits-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-Profits-072114"><img alt="Fed-Balance-Sheet-vs-Profits-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Profits-072114.PNG" style="width: 599px; height: 318px;" /></a></strong></p> <p><strong>Wages To Profits Ratio</strong></p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Wages-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-Wages-072114"><img alt="Fed-Balance-Sheet-vs-Wages-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-Wages-072114.PNG" style="width: 600px; height: 320px;" /></a></p> <p><strong>Employment (Full-Time)</strong></p> <p><strong><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-FT-Employment-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-FT-Employment-072114"><img alt="Fed-Balance-Sheet-vs-FT-Employment-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-FT-Employment-072114.PNG" style="width: 600px; height: 319px;" /></a></strong></p> <p><span style="color: #005dab;"><em><strong>(Note:&nbsp;</strong> The total working age population (ages 16-64) grew by 5.41% during the same period. There is NO evidence that the Fed&#39;s monetary interventions had any impact on employment growth.)</em></span></p> <p><strong>Employment - Not In Labor Force</strong></p> <p><strong><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-NILF-072114.PNG" target="_blank" title="Fed-Balance-Sheet-vs-NILF-072114"><img alt="Fed-Balance-Sheet-vs-NILF-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Fed-Balance-Sheet-vs-NILF-072114.PNG" style="width: 599px; height: 318px;" /></a></strong></p> <p>In December of 2013, Ben Bernanke stated:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;I&#39;m pretty comfortable with the idea that this program did in fact create jobs.&quot;</p> </blockquote> <p>First, businesses create jobs, however, as stated above, there is little evidence that suggests that the job creation was anything other than just the incremental demand created by population growth.&nbsp; Furthermore, it cost roughly 63% less to move someone out of the labor force versus becoming employed.&nbsp; Despite, the Fed&#39;s claims that we are nearing <em>&quot;full employment&quot;</em> in the domestic economy, I am quite sure the 90+ million individuals sitting outside the labor force would disagree.</p> <p>Secondly, while the Federal Reserve achieved its goal of inflating asset prices <em>(the most cost efficient use of their monetary policy at $1.89) </em>it failed to translate into the rest of the economy.&nbsp; The question that the Federal Reserve should be asking is why?</p> <p>Considering that roughly 85% of Americans have little, or no, money invested in the financial markets the inflation of asset prices have had virtually no effect on their standard of living. In an economy that is roughly 70% driven by consumption, asset price inflation does not provide from additional consumption for those unaffected.</p> <p>For the majority of &quot;Main Street,&quot; household budgets remain strained due to rising costs of living that exceed current wage growth. This has kept consumption weak which has continued to suppress wages, employment, production and investment.</p> <p>While most of Wall Street continues to insist that the economy has recovered, the effective costs of that recovery, while still extremely muted, has been very expensive.&nbsp; Yes, corporate profits are indeed higher; however, those profits have come at a huge expense on the average worker as shown below.</p> <p><a class="highslide ageent-ru" href="http://streettalklive.com/images/1dailyxchange/2014/Profits-Wages-Employees-072114.PNG" target="_blank" title="Profits-Wages-Employees-072114"><img alt="Profits-Wages-Employees-072114" class="i_want_img5" src="http://streettalklive.com/images/1dailyxchange/2014/Profits-Wages-Employees-072114.PNG" style="width: 600px; height: 536px;" /></a></p> <p><strong><u><em>Did the Fed&#39;s monetary intervention programs keep the economy from sliding into a much deeper recession?&nbsp;</em> Probably.</u></strong></p> <p><strong><u><em>Have the programs been effective in achieving Bernanke&#39;s stated goals?</em> Not really.</u></strong></p> <p>What the Fed&#39;s monetary policy has succeeded in doing is pulling forward future consumption to boost short-term economic growth.&nbsp; This would have been a great success had that process been used to fully deleverage balance sheets, restructure entitlement programs and refinance the government&#39;s debt at substantially lower rates. Instead, the flush of liquidity was used to boost corporate profitability and act as a massive transfer of wealth from the middle class to the <em>&quot;rich.&quot;</em></p> <p>How this all ends is really anyone&#39;s guess, however, I suspect that future historians will have much to write on the matter.</p> </div> <p>&nbsp;</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="552" height="293" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140702_STA.jpg?1406042326" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/how-effective-have-feds-qe-programs-been#comments Ben Bernanke Ben Bernanke Bond Consumer Confidence Equity Markets Federal Reserve fixed Main Street Monetary Policy Recession recovery Tue, 22 Jul 2014 17:35:48 +0000 Tyler Durden 491528 at http://www.zerohedge.com Flight MH-17 Black Boxes To Be Analyzed In "Impartial" London http://www.zerohedge.com/news/2014-07-22/mh-17-black-boxes-will-be-analyzed-uk-whose-prime-minister-compares-russian-aggressi <p>Now that the black boxes from flight MH-17 have been handed over by the Ukraine separatists to Malaysian authorities (somewhat denting the credibility of the fabricated <a href="http://news.sky.com/story/1304439/russia-told-rebels-to-hide-mh17s-black-boxes">Ukrainian YouTube clip in which the rebels were "instructed" by Moscow to hide the black boxes</a>), there was one question: which impartial entity and/or country would be tasked with an objective retrieval and analysis of the contents. A little while ago we got the answer courtesy of none other than UK Prime Minister David Cameron:</p> <blockquote class="twitter-tweet" lang="en"><p>We've agreed Dutch request for air accident investigators at Farnborough to retrieve data from <a href="https://twitter.com/hashtag/MH17?src=hash">#MH17</a> black boxes for international analysis.</p> <p>— David Cameron (@David_Cameron) <a href="https://twitter.com/David_Cameron/statuses/491589411541626880">July 22, 2014</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>So the Dutch are incapable of analyzing black boxes on their own and needed London's help? Curious.</p> <p>AP has more:&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> Britain's prime minister says black boxes from the Malaysia Airlines plane downed in eastern Ukraine will be examined by U.K. air accident investigators.</p> <p>&nbsp;</p> <p><strong>David Cameron said on Twitter that British experts at the Air Accidents Investigation Branch will retrieve data from the flight recorders for analysis, following a request from the Dutch government.</strong></p> <p>&nbsp;</p> <p>Earlier Tuesday, pro-Russia separatists in Ukraine handed the two black boxes from Flight 17 over to Malaysian investigators in the city of Donetsk. Malaysian Prime Minister Najib Razak said the handover was part of an agreement he had reached with rebel leader Alexander Borodai.</p> <p>&nbsp;</p> <p>Najib said the black boxes appeared "to be in good condition."</p> </blockquote> <p>It remains to be seen if the Air Traffic Control recordings with flight MH17 which as we reported last week were <a href="http://www.zerohedge.com/news/2014-07-18/ukraines-security-service-has-confiscated-air-traffic-control-recordings-malaysian-j">confiscated by the Ukraine secret service</a>, would also be provided to London for a comparable objective inquiry. </p> <p>In the meantime, we await said "objective" conclusion of what the Farnborough crack investigators uncover, the same investigators from the unquestionably objective UK, whose Prime Minister also made the tape <a href="http://www.telegraph.co.uk/news/worldnews/europe/ukraine/10980903/MH17-Europe-must-hit-Russia-hard-with-sanctions-says-David-Cameron.html">one short hour ago</a>, after he <strong>"lost patience with Vladimir Putin’s “bluster and obfuscation” on Monday night and called on Europe to impose “hard-hitting sanctions” on Russia after the downing of Flight MH17.</strong> In his strongest intervention since the disaster, which killed 298 people, <strong>the Prime Minister invoked the spectre of the Second World War and compared Russia’s aggression to that of Nazi Germany."</strong></p> <p>Truly impartial objectivity all around.</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="600" height="450" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/black%20box.jpg?1406048978" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/mh-17-black-boxes-will-be-analyzed-uk-whose-prime-minister-compares-russian-aggressi#comments Germany None Twitter Twitter Ukraine Tue, 22 Jul 2014 17:05:36 +0000 Tyler Durden 491527 at http://www.zerohedge.com The World Is Finally Catching On to the Fed's Failures http://www.zerohedge.com/news/2014-07-22/world-finally-catching-feds-failures <p>For five years, the Fed has managed to fool most of the people.</p> <p>&nbsp;</p> <p>There were some of us who openly criticized the Fed&rsquo;s policies, noting among other things that:</p> <p>&nbsp;</p> <p>1)&nbsp;&nbsp; QE had an abysmal track record as far as generating GDP growth or job creation were concerned (see both Japan and the UK).</p> <p>2)&nbsp;&nbsp; The Fed repeatedly lied about the purpose of its policies (they were aimed at propping up the large insolvent banks, not helping Main Street).</p> <p>3)&nbsp;&nbsp; The Fed&rsquo;s belief in the wealth effect (that higher asset prices would lead to greater consumer spending) was misguided if not outright delusional.</p> <p>&nbsp;</p> <p>For five years, those of us who made such criticisms were in the minority. However, that tide is now turning. We are seeing an increased number of mainstream media outlets run stories that are outright critical of the Fed&rsquo;s policies.</p> <p>&nbsp;</p> <p>Here is a spate of headlines from such articles:</p> <p>&nbsp;</p> <p><strong><em>Have central banks been breaking the law?</em></strong></p> <p>&nbsp;</p> <p><strong><em>The Fed in Danger</em></strong></p> <p>&nbsp;</p> <p><strong><em>Should Janet Yellen Be Giving Us Stock Picks?</em></strong></p> <p>&nbsp;</p> <p>The political tide is beginning to turn against the Fed. After five years of the Fed being completely wrong about everything (remember the &ldquo;growth is just around the corner&rdquo; meme) while simultaneously eviscerating the middle class and increasing wealth inequality, even the mainstream press is catching on that something isn&rsquo;t right.</p> <p>&nbsp;</p> <p>After all, how can you spend over $4 trillion and <em>still</em> be talking about how fragile the economic recovery is? We&rsquo;re now five years into this alleged &ldquo;recovery.&rdquo; Based on a normal business cycle alone the economy should be roaring forward rather than posting the pathetic -2.9% growth rate of 1Q14.</p> <p>&nbsp;</p> <p>Indeed, even the Fed&rsquo;s underlings are now pointing out what an abysmal job the Fed has done. <strong>According got the Fed&rsquo;s OWN RESEARCH unemployment is a mere 0.13% lower courtesy of FIVE YEARS of extraordinary</strong> <strong>monetary measures</strong></p> <p>&nbsp;</p> <p style="margin-left:.5in;"><em>Without the Fed and its low interest rates, the jobless rate would have been higher these past few years &ndash; pretty much all economists agree on that.</em></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><em>But how much worse would things have been?</em></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><em>A paper written by two economists for the Atlanta Fed takes a stab at answering that question.</em></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><em>Leaving aside the fuzzy math of economics, the researchers conclude the four years of easy money lowered the unemployment rate by .13 percentage points.</em></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><strong><em>The national rate in December 2013 was 6.7 percent. So, if the Fed had not been so aggressive, the rate would have been 0.13 points higher &mdash; 6.83 percent. Not dramatic (unless you are one of the several thousand people who kept your job as a result).</em></strong></p> <p style="margin-left:.5in;">&nbsp;</p> <p style="margin-left:.5in;"><em>But if the Fed had done nothing at all? That would have mean an unemployment rate a full 1 percent higher: 7.7 percent in December.</em></p> <p>&nbsp;</p> <p style="margin-left:.5in;"><em><a href="http://www.ajc.com/news/business/economy/fed-helped-save-jobs-study-says/ngTTQ/">http://www.ajc.com/news/business/economy/fed-helped-save-jobs-study-says/ngTTQ/</a></em></p> <p>&nbsp;</p> <p>The fact that this article is not written sarcastically is astounding. The Fed spent over $4 trillion and it only lowered unemployment by 0.13%.<strong> How many millions of dollars per job saved is that?</strong></p> <p>&nbsp;</p> <p>This is the reality of Central Planning: a handful of bureaucrats can never accurately manage, let alone improve something as large and complicated as a national economy.</p> <p>&nbsp;</p> <p>History is replete with the total failure of Central Planning. Whether one look to China or the USSR or the US today, Central Planning has never successfully worked. &nbsp;It creates the illusion of stability in the short-term, but eventually the truth comes out: that it is a TERRIBLE means of deploying capital (both human or monetary).</p> <p>&nbsp;</p> <p>The Fed&rsquo;s failures are just the latest example. And by the look of things, the world is beginning to catch on. Now it&rsquo;s simply a question of waiting for stocks to do the same.</p> <p>&nbsp;</p> <p>This concludes this article. If you&rsquo;re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled <strong><em>Protect Your Portfolio</em></strong> at <a href="http://phoenixcapitalmarketing.com/special-reports.html">http://phoenixcapitalmarketing.com/special-reports.html</a>.</p> <p>&nbsp;</p> <p>This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.</p> <p>&nbsp;</p> <p>Best Regards</p> <p>&nbsp;</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> http://www.zerohedge.com/news/2014-07-22/world-finally-catching-feds-failures#comments Central Banks China headlines Janet Yellen Japan Main Street Reality recovery Unemployment Tue, 22 Jul 2014 16:53:02 +0000 Phoenix Capital Research 491526 at http://www.zerohedge.com With 1 Week Left Until Argentina's 'D'efault-Day, Judge Blasts "Judgments Are Judgments" http://www.zerohedge.com/news/2014-07-22/1-week-left-until-argentinas-default-day-judge-blasts-judgments-are-judgments <p>Day after day, headlines from <strong>Argentina implore Judge Griesa to do the "fair, responsible" thing</strong> and lift his judgment that holdouts get paid before current bondholders receive their payments... and day after day Argentina's demands are met with silence or denials. Today, though, with 1 week left until Argentina must put up or shut up, Judge Griesa has come out swinging...</p> <ul> <li><strong>*U.S. JUDGE SAYS OF ARGENTINA RULINGS: '<span style="text-decoration: underline;">JUDGMENTS ARE JUDGMENTS</span>'</strong></li> <li><strong>*ARGENTINA'S 'INCENDIARY` RHETORIC `UNFORTUNATE,' JUDGE SAYS</strong></li> <li><strong>*U.S. JUDGE URGES 'SENSIBLE STEPS' TO AVOID ARGENTINA DEFAULT</strong></li> </ul> <p>While CDS spreads have surged once again, bonds trade with default probabilities around only 50% which, according to Jefferies "are expensive on <strong>underestimating the risk of default</strong>."</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140702_arg.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140702_arg_0.jpg" width="600" height="315" /></a></p> <p>&nbsp;</p> <p><em>As Bloomberg reports,</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>U.S. District Judge Thomas Griesa declined to rule immediately on calls by holders of defaulted Argentina bonds to bar payment on some dollar- and yen-denominated debt in a hearing in Manhattan federal court. </strong></p> <p>&nbsp;</p> <p>Argentina had asked the judge to delay rulings that bar the country from making payments on its restructured debt before paying holders of defaulted bonds as it faces a possible second default this month.</p> <p>&nbsp;</p> <p>The South American nation <strong>renewed its request for a delay so it can negotiate without risking liability for what it argues could be billions of dollars in new claims by holders of defaulted and restructured bonds.</strong> That request has yet to be addressed.</p> <p>&nbsp;</p> <p>Today, Griesa began the proceedings by hearing arguments about whether his orders bar payments to holders of U.S. dollar-denominated exchange bonds issued under Argentine law and payable in that country, without a corresponding payment to holders of the defaulted bonds.</p> </blockquote> <p>Judge Griesa is not happy...</p> <ul> <li><strong>*U.S. JUDGE URGES `SENSIBLE STEPS' TO AVOID ARGENTINA DEFAULT</strong></li> <li><strong>*U.S. JUDGE REAFFFIRMS RIGHTS OF DEFAULTED ARGENTINA BONDHOLDERS</strong></li> <li><strong>*U.S. JUDGE SAYS OF ARGENTINA RULINGS: `JUDGMENTS ARE JUDGMENTS'</strong></li> <li><strong>*GRIESA CITES ARGENTINA REFUSAL TO PAY NUMEROUS COURT JUDGMENTS</strong></li> <li><strong>*ARGENTINA'S `INCENDIARY` RHETORIC `UNFORTUNATE,' JUDGE SAYS</strong></li> <li><strong>*ARGENTINA DEFAULT `WOULD BE MOST UNFORTUNATE' U.S. JUGDE SAYS</strong></li> <li><strong>*ARGENTINA DEFAULT JUDGE SAYS WE HAVE ARRIVED AT 'CRUCIAL TIME'</strong></li> <li><strong>*U.S. JUDGE CITES ARGENTINA'S `OBLIGATIONS' TO BONDHOLDERS</strong></li> <li><strong>*ARGENTINA BOND PARTIES MUST MEET WITH MEDIATOR `CONTINUOUSLY'</strong></li> </ul> <p>Jefferies warns bonds are underestimating the risk...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Argentine bonds sold under New York law due 2033 “are expensive on underestimating the risk of default,” </strong>which is 50% and increasing, Siobhan Morden, the head of Latin America strategy at Jefferies Group, wrote in a report today</p> </blockquote> <p>*&nbsp; *&nbsp; *<br />Argentina will enter into technical default on its restructured bonds on July 30 unless it reaches an agreement with the holdouts.</p> <p>The clock is ticking... and Argentina is furious...</p> <ul> <li><strong>*ARGENTINA LAWYER SAYS COURT ORDERS RISK 'IMMINENT' DEFAULT</strong></li> <li><strong>*ARGENTINA LAWYER SAYS JULY ACCORD FACES `HUGE CONSTRAINTS'</strong></li> </ul> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Three weeks after President Cristina Fernandez de Kirchner sent $539 million to pay bondholders, the money remains in limbo as a U.S. court considers what to do with the funds.</p> <p>&nbsp;</p> <p><strong>Fernandez said on July 16 the country can’t default because it sent the funds to the banks</strong>, and now it’s the responsibility of bondholders to demand payment from the judge and intermediary banks.</p> <p>&nbsp;</p> <p><strong>“Only countries that stop paying their debt fall into default,” Fernandez said at a conference in Brazil. “Argentina will keep paying its debt and meeting its obligations.”</strong></p> </blockquote> <p>We shall see...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>We leave it to Judge Griesa to conclude...</strong></p> <p>"IN MY VIEW, <span style="text-decoration: underline;"><strong>EVERY SINGLE PROBLEM YOU'VE [ARGENTINA] DESCRIBED IS SUSCEPTIBLE TO BE HANDLED IN A SETTLEMENT</strong></span>...</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>IF WE DON'T, THERE WILL BE A DEFAULT, AND THAT IS THE WORST THING.</strong></span>"</p> </blockquote> <p>Bond prices are falling after the judge's latest ruling...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140702_arg1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140702_arg1_0.jpg" width="600" height="320" /></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="956" height="502" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140702_arg.jpg?1406047388" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/1-week-left-until-argentinas-default-day-judge-blasts-judgments-are-judgments#comments Bond Brazil CDS default headlines Restructured Debt Tue, 22 Jul 2014 16:44:36 +0000 Tyler Durden 491525 at http://www.zerohedge.com MYSTeRiouS WHiTe FLaGs... http://www.zerohedge.com/news/2014-07-22/mysterious-white-flags <p style="text-align: center;"><iframe src="https://www.flickr.com/photos/expd/14738085433/player/" width="1024" height="576" frameborder="0"></iframe></p> http://www.zerohedge.com/news/2014-07-22/mysterious-white-flags#comments Tue, 22 Jul 2014 16:32:06 +0000 williambanzai7 491524 at http://www.zerohedge.com After Delta Reroutes Flight Into Israel, 5 Other Airlines Suspend Flights To Tel Aviv On Missile Worries http://www.zerohedge.com/news/2014-07-22/after-delta-reroutes-flight-israel-5-other-airlines-suspend-flights-tel-aviv-missile <p><em>Update: </em><strong>U.S. FLIGHTS TO ISRAEL HALTED BY FAA</strong></p> <p>About two hours ago, and in the aftermath of the public outcry regarding flights in conflict zones, first Delta then most other major international carriers announced they would suspend flights to Israel "until further notice" amid concerns that a rocket landed near Ben Gurion International Airport in Tel Aviv. The list of confirmed airlines that have halted such flights is shown below.</p> <ul> <li>US Airways also said it has canceled two flights to and from Tel Aviv from Philadelphia.</li> <li>United Airlines canceled two flights from Newark to Tel Aviv, according to FlightAware.com.</li> <li>American Airlines told NBC News that it is meeting to discuss the situation.</li> <li>Lufthansa said there are no changes to its Tel Aviv flight schedules for now.</li> <li>British Airways said it continued to operate as normal but is monitoring the situation.</li> <li>KLM said it was meeting to discuss the issue.</li> </ul> <p><a href="http://www.nbcnews.com/storyline/middle-east-unrest/some-major-airlines-cancel-flights-israel-amid-missile-worries-n162096">According to NBC</a>, "the move comes amid heightened concerns over the safety of passenger aircraft flying over war zones. A Malaysian Air Lines jet with 298 aboard was brought down as it was flying over contested Ukrainian territory. The White House said the Federal Aviation Administration has not issued any notices about flights over the Middle East. Israeli police spokesman Micky Rosenfeld told NBC News there is no event to the best of his knowledge taking place now at Ben Gurion. He said he believes the Delta cancellation probably came after a rocket fell 3 miles from the airport earlier Tuesday."</p> <p>The flight redirection is shown most vividly in the following flight pattern of Delta flight 468 from New York to Tel Aviv (via <a href="http://www.flightradar24.com/data/flights/dl468/#3dfffc2">Flightradar24</a>) which was rerouted shortly before arrival and landed in Paris instead.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/DAL%20468.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/DAL%20468_0.jpg" width="600" height="318" /></a></p> <p>Meanwhile Israel says there is nothing to fear. From Bloomberg:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>After US Air and Delta cancel flights scheduled to land in Israeli airport this evening, Transport Minister Israel Katz says Ben-Gurion safe for landings and take-offs, according to Aviation Authority. No concern for safety of planes or passengers.</p> </blockquote> <p>For now, however, nobody is taking chances with another MH17 tragedy.</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="990" height="524" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/DAL%20468.jpg?1406046284" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/after-delta-reroutes-flight-israel-5-other-airlines-suspend-flights-tel-aviv-missile#comments Israel Middle East NBC White House Tue, 22 Jul 2014 16:26:41 +0000 Tyler Durden 491523 at http://www.zerohedge.com William O'Brien, Infamous CEO Of BATS, Has Left The Firm http://www.zerohedge.com/news/2014-07-22/william-obrien-infamous-ceo-bats-has-left-firm <p>Remember when IEX' <a href="http://www.zerohedge.com/news/2014-04-03/bats-admits-ceo-lied-about-hft-cnbc">Brad Katsuyama swept the floor </a>with BATS CEO Bill O'Brien, exposing him as a liar on national TV in his spirited defense of HFT and an "unrigged market"? Well, Bill has just left the building: as BATS reported moments ago he is no longer with the firm.</p> <p><em>From the <a href="http://cdn.batstrading.com/resources/press_releases/Transition-Departure-FINAL.pdf">Press Release</a>:</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>BATS Global Markets Announces Departure of William O’Brien;&nbsp; Joe Ratterman, CEO, Reassumes Additional Role Of President </strong></p> <p>&nbsp;</p> <p>KANSAS CITY, Mo. – July 22, 2014 – BATS Global Markets (BATS) today announced the departure of William O’Brien as President, effective immediately, with CEO Joe Ratterman reassuming the additional role of President.</p> <p>&nbsp;</p> <p>Mr. Ratterman previously held both the CEO and President roles from June 2007 through January 2014. He joined BATS in June 2005 as a founding employee.</p> <p>&nbsp;</p> <p>In addition to Mr. Ratterman as CEO and President, the remainder of the executive management team is unchanged with Chris Isaacson, Executive Vice President, Global Chief Information Officer; Tami Schademann, Executive Vice President, Chief Regulatory Officer; Eric Swanson, Executive Vice President, General Counsel; Mark Hemsley, CEO of BATS Chi-X Europe; Brian Schell, Executive Vice President, Chief Financial Officer; and Bryan Harkins, Executive Vice President, Head of U.S. Markets.</p> <p>&nbsp;</p> <p>The full executive team will report directly to Mr. Ratterman.</p> </blockquote> <p>In case you missed the exchange, here it is again:</p> <p><object width="600" height="450" data="//www.youtube.com/v/irsin7GKiZw?hl=en_US&amp;version=3" type="application/x-shockwave-flash"><param name="allowFullScreen" value="true" /><param name="allowscriptaccess" value="always" /><param name="src" value="//www.youtube.com/v/irsin7GKiZw?hl=en_US&amp;version=3" /><param name="allowfullscreen" value="true" /></object></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="275" height="183" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/O%27brien.jpg?1406045658" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/william-obrien-infamous-ceo-bats-has-left-firm#comments BATS HFT Tue, 22 Jul 2014 16:15:21 +0000 Tyler Durden 491522 at http://www.zerohedge.com How the Surge of Hot Money Pushes San Francisco to the Brink http://www.zerohedge.com/news/2014-07-22/how-surge-hot-money-pushes-san-francisco-brink <p>Wolf Richter&nbsp;&nbsp; <a href="http://www.wolfstreet.com">www.wolfstreet.com</a>&nbsp;&nbsp; <a href="http://www.amazon.com/author/wolfrichter">www.amazon.com/author/wolfrichter</a></p> <p>The median home price in my beloved and crazy San Francisco &ndash; that&rsquo;s for a no-view two-bedroom apartment in an older building in a so-so area &ndash; after rising 13.3% from a year ago, hit an&nbsp;ultra-cool, slick &nbsp;$1,000,000.</p> <p>It made a splash in our conversations. People figured that <em>nothing</em> could to take down the housing market. Yet, as before, there will be a devastating event: the moment when the billions from all over the world suddenly stop raining down on San Francisco.</p> <p>Every real-estate data provider has its own numbers. The Case-Shiller&nbsp;placed the peak of the prior bubble in &ldquo;<a href="http://www.spindices.com/indices/real-estate/sp-case-shiller-20-city-composite-home-price-index" target="_blank"><font color="#0009c4">San Francisco</font></a>&rdquo; in June 2006 with an index value of 218, well above the current index value of 191.&nbsp;Though named &ldquo;San Francisco,&rdquo; the index covers five Bay Area counties that include cities like Oakland and Richmond where home prices, though soaring, haven&rsquo;t gone back to previous bubble peaks.</p> <p>The $1,000,000 that <a href="http://www.dqnews.com/Articles/2014/News/California/Bay-Area/RRBay140716.aspx" target="_blank"><font color="#0009c4">DataQuick</font></a>, now part of CoreLogic, came up with is for the actual city of San Francisco. In the data series, San Francisco&rsquo;s prior housing bubble peaked in November 2007 when the median home price hit $814,750. People thought this would go on forever, that San Francisco was special, that the national housing bust would pass it by. A month later, the median home price plunged 10%.</p> <p>It was the beginning of a terrible bust &ndash; the moment when money from all over the world stopped raining down on San Francisco. Real estate here lives and dies with the periodic storm surges of moolah from venture capital investors, IPOs, and corporate buyouts.</p> <p>Now we&rsquo;re in another storm surge. The Twitter IPO transferred billions from around the world to Twitter investors and employees in the city and the Bay Area. When Facebook acquired Whatsapp for $19 billion, its 55 employees and some investors started plowing some of this money into the local economy, money that didn&rsquo;t&nbsp;come from heaven but indirectly from Facebook shareholders. In the current climate, hundreds of transactions, large and small, take place every month, including a slew of IPOs. That&rsquo;s the great hot-money-transfer machine. And San Francisco sits at the receiving end.</p> <p>There are some drawbacks, however. Number one, it won&rsquo;t last. It just prepares the way for the next bust. Number two (and in the interim), it forces out real businesses with real revenues and profits. And it drives out people who find themselves &ndash; though well-employed &ndash; financially unable to live here any longer.</p> <p>Take the story of Bloodhound that was catapulted into the limelight by <a href="http://valleywag.gawker.com/how-quickly-a-genius-startup-can-tank-1599840136" target="_blank"><font color="#0009c4">ValleyWag</font></a>. In January 2013, a Series A round brought its total funding to $4.8 million, based on its conference app, an &ldquo;ambitious vision to fundamentally change how buyers meet sellers,&rdquo; as <a href="http://techcrunch.com/2013/01/23/bloodhound-event-app/"><font color="#0009c4">TechCrunch</font></a> put it. &ldquo;Its hardcore dedication to product and the fact that it can reuse everything it builds puts it leagues ahead of&hellip;.&rdquo; Etc. etc. The article was dripping with startup hype.</p> <p>Companies like Bloodhound are flush with money from investors and have no need to make revenues or profits, and they have no clue how to manage expenses, or that expenses even need to be managed, and there&rsquo;s nothing to constrain them in any way and force them to be prudent with investors&rsquo; money. Armed to the teeth this way, they dive into the local real estate market.</p> <p>As the startup bubble in San Francisco was coming to a&nbsp;boil, and billions started showing up in bits and pieces, landlords began lusting after this money. And so in October 2012, the Million Fishes Art Collective &ndash; &ldquo;<a href="http://millionfishes.com/" target="_blank"><font color="#0009c4">an incubation program</font></a>&rdquo; for artists &ndash; was not able to renew its lease on a 10,000 square-foot space on Bryant Street at 23rd Street, in the Mission, which had been an iffy area and therefore affordable. After ten years, Million Fishes was gone, and so were the artists and the shows that had been open to the public. It reportedly had been paying over $13,000 per month.</p> <p>The space was prepared for a startup armed with hype, hoopla, and Series-A money piped in from VC-fund investors around the world. Along come Bloodhound with whatever remained of its $4.8 million in funding. It signed a 5-year lease for $31,667 a month in rent and $564 in fees, or nearly 150% more than Million Fishes had paid. The neighborhood wasn&rsquo;t amused, but hey, big money rules, and it was a done deal.</p> <p>So Bloodhound was blowing $387,000 a year on rent, and it didn&rsquo;t care because expenses were no objective because profits weren&rsquo;t even on the horizon. It was just building a thingy that would forever change the world. But now Bloodhound is gone as well. Stopped paying rent, ran out of money, just packed up and disappeared. <em>ValleyWag</em> reported:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>When emailed for comment, Bloodhound co-founder Anthony Krumeich simply stated &ldquo;We moved out of the office. No longer fit our needs.&rdquo; However court documents indicate Bloodhound has gone AWOL and abandoned their office. The landlord&rsquo;s attorney has not been able to issue the company or its founders a summons&hellip;.</p> </blockquote> <p>Bloodhound didn&rsquo;t change the world. But its hot money changed San Francisco. It helped drive up rents. Each transaction impacts a number of future transactions via the multiplier effect. This scenario is repeated over and over. Enterprises with real cash flows are pushed out because they can&rsquo;t compete with the hot money that briefly comes into town looking to multiply itself.</p> <p>But occasionally, it goes too far, even for San Francisco. A little while ago, Pinterest jumped into the fray. It has raised $800 million so far, and sports a valuation of $5 billion, but has no noticeable revenues, doesn&rsquo;t even dream of profits, and has no idea how to&nbsp;control expenses &ndash; and no need to. Armed with this distorted attitude and hundreds of millions of dollars in global hot money, it set its sights on the beautiful, historic 600,000 square-foot San Francisco Design Center at 2 Henry Adams St., where 77 design businesses were plying their trade the hard way by generating the cash flow necessary to sustain themselves.</p> <p>The Design Center&rsquo;s owner, according to the <a href="http://www.sfgate.com/bayarea/article/Supes-won-t-let-Pinterest-move-into-Design-Center-5605486.php#photo-6478211" target="_blank"><font color="#0009c4">SFGate</font></a>, &ldquo;had sought to take advantage of a city zoning ordinance that allows owners of designated historic landmarks to change zoning from so-called PDR &ndash; production, distribution and repair &ndash; to traditional office space. That would have allowed Pinterest to locate its offices there.&rdquo; The tenants would have been booted out in favor of a company that had no reason to care about how much money it blew on office space. Alas, after an uproar, the Board of Supervisors Land Use &amp; Economic Development Committee voted to table the matter indefinitely.</p> <p>The ratchet effect continues as each transaction impacts future transactions, pumped up by hot money that doesn&rsquo;t care about actual expenses and profits. And the space Million Fishes had leased for $13,000 a month, and that Bloodhound had leased for $31,667 a month, went back on the market, <em>ValleyWag</em> reported, at $37,500 a month.</p> <p>This too is happening to homes where one sale price of one home impacts the price on average of 60 others via the multiplier effect<font color="#0009c4"> [</font><a href="http://wolfstreet.com/2014/07/02/how-wall-street-manipulates-the-buy-to-rent-housing-racket/">How Wall Street Manipulates The Buy-to-Rent Housing Racket</a>]. That&rsquo;s how the median home price of $1,000,000 came about: powered by hot money that follows hope and hype about the next big thingy that will change the world. As before, someday the hot money will suddenly evaporate, with devastating effect. To pinpoint that moment, we just have to watch the IPO market. When it blows off its top, so will San Francisco.</p> <p>UBS is already preparing for that moment. The world&rsquo;s largest wealth manager is &ldquo;very worried&rdquo; about &ldquo;the lack of liquidity&rdquo; that could wreak havoc during the expected sell-off. So UBS reduces risk &ldquo;over the full spectrum of assets.&rdquo; Read&hellip;. <a href="http://wolfstreet.com/2014/07/20/ubs-warns-everything-is-overpriced-prepares-for-sell-off/"><span style="text-decoration: underline"><span style="color: rgb(0,9,196)">UBS Warns Everything Is Overpriced, Prepares For Sell-Off </span></span></a></p> http://www.zerohedge.com/news/2014-07-22/how-surge-hot-money-pushes-san-francisco-brink#comments Case-Shiller ETC Housing Bubble Housing Market Real estate Twitter Twitter Tue, 22 Jul 2014 16:03:06 +0000 testosteronepit 491521 at http://www.zerohedge.com US Government Releases Alleged Evidence Of MH17 Missile Trajectory http://www.zerohedge.com/news/2014-07-22/us-government-releases-alleged-evidence-mh17-missile-trajectory <p>The 'information war' is hotting up. On the heels of yesterday's 30-minute detailed presentation of Russia's 10 awkward questions for Ukraine (and the US), CNN reports that the US government has released a satellite trajectory <strong>map of what it says was the flight's path and the site from which the missile was shot</strong>. Of course, the epicenter of the MH17 launch is Snizhne, in pro-Russian separatist-held territory. Rebel leader Alexander Borodai responded, <em>"we don't have the technical ability to destroy this plane. <strong>Ukrainians are not interested in the truth</strong>."</em></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140722_MH17.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140722_MH17_0.jpg" width="600" height="442" /></a></p> <p><em>h/t @BarbaraStarrCNN</em></p> <p>Which is right in the heart of separatist-held territory...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140722_MH171.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/07/20140722_MH171.jpg" width="600" height="585" /></a></p> <p>&nbsp;</p> <p>We await the detailed presentation of exactly what this means (or what The White House believes it to mean) ... or if it is simply a well drawn Powerpoint slide?</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="1188" height="875" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20140722_MH17.jpg?1406035508" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/us-government-releases-alleged-evidence-mh17-missile-trajectory#comments Ukraine White House Tue, 22 Jul 2014 15:49:03 +0000 Tyler Durden 491513 at http://www.zerohedge.com As Gaza Death Toll Surpasses 600 Israel Ambassador Says IDF Deserve Nobel Peace Prize For "Unimaginable Restraint" http://www.zerohedge.com/news/2014-07-22/gaza-death-toll-surpasses-600-israel-ambassador-says-idf-deserve-nobel-peace-prize-u <p>The situation in Gaza has crossed beyond the rabbit hole (or perhaps in this case, tunnel) and has entered the surreal zone. </p> <p>Consider, from <a href="http://www.reuters.com/article/2014/07/22/us-palestinians-israel-idUSKBN0FP00U20140722">Reuters</a>: "<strong><em>Israel pounded targets across the Gaza Strip on Tuesday, saying no ceasefire was near as top U.S. and U.N. diplomats pursued talks on halting fighting that has claimed more than 600 lives.</em>"</strong> On the other side, Israel's military announced that the total number of army fatalities have risen to 29, three times as many as were killed in the last ground invasion of Gaza, in a 2008-2009 war.</p> <object id="rcomVideo_324315866" width="460" height="259" data="http://www.reuters.com/resources_v2/flash/video_embed.swf?videoId=324315866&amp;edition=BETAUS" type="application/x-shockwave-flash"><param name="data" value="http://www.reuters.com/resources_v2/flash/video_embed.swf?videoId=324315866&amp;edition=BETAUS" /><param name="allowFullScreen" value="true" /><param name="allowScriptAccess" value="always" /><param name="wmode" value="transparent" /><param name="src" value="http://www.reuters.com/resources_v2/flash/video_embed.swf?videoId=324315866&amp;edition=BETAUS" /><param name="allowfullscreen" value="true" /></object> <p>Among the Gaza targets: five mosques, a sports stadium and the home of the deceased Hamas military chief. But why is Israel targeting what are clearly civilian locales? "Israeli military accuses Hamas militants of firing rockets from the grounds of Gaza hospitals and seeking refuge there." Remember, this was supposed to be a "pinpoint military operation."</p> <p>About 2,000 rockets have been launched over the past fortnight, Israeli military says. The country has also been destroying tunnels that Hamas reportedly constructed from Gaza into Israel to carry out attacks.</p> <p>Jens Laerke, spokesman of the UN Office for Humanitarian Assistance (OCHA) said at a Geneva news briefing that nearly 500 homes have been destroyed in the Israeli bombardments and 100,000 people have been displaced. Of course, if this had been any other part of the world than Gaza, the UN, the Western media and everyone else would be at arms over the humanitarian crisis that has developed in Gaza. But, well, it's Gaza.</p> <p>All of this is happening despite Kerry's arrival in the region in an attemp to fix things. Or rather, due to.<em> U.S. Secretary of State John Kerry held discussions in neighboring Egypt, while U.N. Secretary General Ban Ki-moon flew to Israel to see Prime Minister Benjamin Netanyahu and meet on Wednesday with the Palestinian prime minister in the occupied West Bank. </em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Dispatched by U.S. President Barack Obama to the Middle East to seek a ceasefire, Kerry held talks on Tuesday in Cairo with Egyptian Foreign Minister Sameh Shukri.</p> <p>&nbsp;</p> <p>"There is a framework ... to end the violence and that framework is the Egyptian initiative," Kerry said at a joint news conference with Shukri.</p> <p>&nbsp;</p> <p>"For the sake of thousands of innocent families whose lives have been shaken and destroyed by this conflict, on all sides, we hope we can get there as soon as possible," he said.</p> </blockquote> <p>His words were summarily ignored and dismissed by Israel which has no intention of reducing the soaring body count: ""A ceasefire is not near," said Justice Minister Tzipi Livni, viewed as the most dovish member of Israeli Prime Minister Benjamin Netanyahu's inner security cabinet.&nbsp; "I see no light at the end of the tunnel," she told Israel's Army Radio."</p> <p>There is some good news: Kerry said the United States would provide $47 million in humanitarian aid for Gaza. He plans to stay in Cairo until Wednesday morning but has no set departure date from the region.</p> <p>In other words, the latest Gaza land invasion, which is now far more deadly than the last invasion during the 2008-2009 war, is nowhere near finding a resolution, which perhaps is just the catalyst the S&amp;P 500 needed to keep rising to recorder highs.</p> <p>* * * </p> <p>But where things get truly surreal, was the statement by Israel’s ambassador to the United States, Ron Dermer, <a href="http://www.timesofisrael.com/dermer-idf-deserves-nobel-peace-prize-for-unimaginable-restraint/">who said on Tuesday </a>that <strong>the Israeli army should be given the Nobel Peace Prize for its “unimaginable restraint” in Gaza</strong>.</p> <p>Well, considering Barack "Don't drone me, bro" Obama received it, why not?</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>During an address at the Christians United for Israel Summit in Washington, Dermer was interrupted several times by hecklers, but delivered a passionate and warmly received speech in defense of Operation Protective Edge, calling Iran the “Great Evil” and accusing the United Nations and human rights groups of inadvertently aiding Hamas in its war against Israel.</p> <p>&nbsp;</p> <p>“<strong>Some are shamelessly accusing Israel of genocide and would put us in the dock for war crimes</strong>,” Dermer said. “<span style="text-decoration: underline;"><strong>But the truth is that the Israeli Defense Forces should be given the Nobel Peace Prize… a Nobel Peace Prize for fighting with unimaginable restraint</strong></span>.”</p> <p>&nbsp;</p> <p>Dermer’s comments followed a statement issued by Foreign Minister Avigdor Liberman, who on Sunday said that the IDF is the “<strong>most humane and bravest army in the world.”</strong></p> </blockquote> <p>And scene.</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="682" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Gaza%20in%20flames.jpg?1406043450" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-22/gaza-death-toll-surpasses-600-israel-ambassador-says-idf-deserve-nobel-peace-prize-u#comments Barack Obama Iran Israel Middle East Reuters Tue, 22 Jul 2014 15:42:26 +0000 Tyler Durden 491520 at http://www.zerohedge.com