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European (And US?) Banker Bonuses Capped At Twice Base Salary





Just days before the UK's Barclays bank is set to unveil the number of staff who earned more than GBP1 million last year in its annual report, as part of a push for more transparency, the FT reports that a provisional EU deal - set to go into place in January 2014, will bring the most severe pay crackdown since the 2008 crisis began. European Bankers' bonuses (and their US subsidiaries) are to be capped at two times bankers' salaries and banks will be subject to a strict transparency regime after a late Wednesday European parliament vote secured agreement on a mandatory 1:1 ratio on salary relative to variable pay, which can rise to 2:1 with explicit shareholder approval. With the UK 'threatening' referenda in the future, the deal, if confirmed, is a major victory for the EU parliament negotiators, who insisted on pay curbs as their price for passing Basel; and a sign of London’s relative isolation on some financial services issues. As far as a workaround, the EU commissioner responsible for the reforms, said it was "difficult to imagine now that we would scrap this compromise," though we are sure they will find a way, especially as MEPs want the tougher version eventually to apply to hedge funds and investment managers.

 
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Rand Paul To CIA: "Can You Kill With Drones In The USA?"





This letter is a few days old, but is very important for every American to be aware of. Essentially, Rand Paul is threatening to filibuster Barack Obama’s nominee for the CIA, John Brennan, due to his refusal to answer a simple question: Do you believe that the President has the power to authorize lethal force, such as a drone strike, against a U.S. citizen on U.S. soil, and without trial? This should not be a complicated question to answer, yet it seems Obama, Brennan and pretty much every other little power consumed bureaucrat is incapable of doing so.

 
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Founded By Geniuses And Run By Idiots





H. L. Mencken correctly observed: "Government is actually the worst failure of civilized man. There has never been a really good one, and even those that are most tolerable are arbitrary, cruel, grasping and unintelligent." The following 14 rhetorical questions should provide food for thought as they suggest... "you might live in a country founded by geniuses but run by idiots."

 
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Guest Post: How Demography Is Changing Japan





The increasingly inverted structure of Japan’s population pyramid, with fewer young people than old people, means that it will be very difficult to generate the tax revenues necessary to pay for the healthcare needs of the elderly. Many have argued that a smaller population in Japan is a good thing, because the country is currently very crowded—indeed, many Japanese feel this way.  Whether or not this is true, it is certain that Japan will face major challenges in responding to the pragmatic issues of managing and maintaining an infrastructure built by and for a much larger population, as well as issues such as shifting economic patterns and workforce composition as a result of a changing age structure of the society. Today, the Japanese have no desire for empire and expansion, but the fact remains that population is a variable that remains central to how Japan, and its neighbors, will interact and respond to tensions, such as the current problems surrounding disputed territory in East Asia.

 
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Moroccan Pottery Classes, Shrimp On Treadmills And Obamaphones - Bernanke's Biggest Bloopers Tie It All Together





Those who listened to Bernanke's three hour oratory before the House Committee today noticed something different: the Chairman's tone was far more resigned, and as noted previously, on occasion devolved into incoherent, illogical ramblings that may be satisfactory for an introductory economics class at Clown College (aka Princeton), but certainly are inappropriate for the man who runs the world's most important printer. And while as expected the bulk of the Q&A session focused on the sequester, there were enough pearls one could shake a GDP hockeystick at. We have extracted the best of these exchanges below. However, the definitive five minutes comes from this fiery confrontation between Sean Duffy and the Chairman, in which the republican has obviously had enough with the monetary policy chief coming in Congress and telling Congress how to conduct fiscal policy, when it is Bernanke's deficit-monetizing actions that allow zero-cost borrowing and thus profligate, indiscriminate spending to result in such lunacy as total US debt just hitting a record 16,618,701,810,927.77From the negative jobs impact resulting from cutting Moroccan Pottery Classes, no longer handing out Obamaphones, stopping the payment of travel expenses for the watermelon queen in Alabama, and most importantly preventing shrimp from running on a treadmill, to Bernanke explaining how a 2% cut in the budget would result in mass mayhem, in the context of a 1% interest rise resulting in $100 billion in additional interest expense, and much, much more, the Chairman ties it all together.

 

 
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Guest Post: Bureaucratic Blunder Helps Over 100 Oil Companies Avoid Paying Royalties





Democratic lawmaker Representative Edward Markey of Massachusetts has used information from the Interior Department to form a report which claims that more than 100 oil and gas producers, including Chevron Corp., BP Plc, Exxon Mobil Corp., Royal Dutch Shell Plc, and ConocoPhillips, have benefitted from bungled leases awarded by the federal government. The leases enabled the companies to drill for oil and gas in federal waters without paying, or at least paying at a much lower rate, any royalties.

 
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The Bernanke Circ(us)





 
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Main Street Sours As Wall Street Soars





"Wealth Effect"

 
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Bernanke's 'Inflation' Record





Addressing a question yesterday, from Senator Bob Corker, on his "being the biggest dove since World War II" and the "degrading effects that he's having on society," Bernanke responded proudly that be believed his "inflation record is the best of any Federal Reserve Chairman in the post-war period." Of course that is by his measure. We suggest, he and few of his transitory colleagues look at the chart below for a sense of just what his 'dovishness' looks like to the rest of the food- and energy-consuming world... or perhaps by 'best' he means 'most'.

 
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Stocks Surge On Endless Easy Money Promises As Italy Is Long Forgotten





Stocks surged their most in 2013 today on slightly above-average volume as the Dow pushed towards its all-time closing highs and Transports went vertical (up 3.5% in Feb). While it no longer matters, it is worth noting that Treasuries and FX markets were not partaking as a broad basket of risk-assets suggests the S&P going out 20 points rich to reality. Materials are stil -1.5% on the month and Staples are leading +2.4%. In the last hour, the S&P even left behind its main driver - VIX - as the 'fear' index could not break below 14.5%. Of most notice today was the fact that equities have retraced all of their losses from the Italian election headlines and recoupled with gold on the week. The high-yield bond ETF HYG rose along with stocks but also notably the underlying HY bond market actually saw selling pressure as HYG's intrinsic value dropped markedly. Late on, trade size rose notably as S&P futures touched the under-side of the 3-month up-trend channel.

 
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Guest Post: 50 Signs That The U.S. Health Care System Is About To Collapse





The U.S. health care system is a giant money making scam that is designed to drain as much money as possible out of all of us before we die.  In the United States today, the health care industry is completely dominated by government bureaucrats, health insurance companies and pharmaceutical corporations. At this point, our health care system is a complete and total disaster.  Health care costs continue to go up rapidly, the level of care that we are receiving continues to go down, and every move that our politicians make just seems to make all of our health care problems even worse. At the same time, hospital administrators, pharmaceutical corporations and health insurance company executives are absolutely swimming in huge mountains of cash.  Unfortunately, this gigantic money making scam has become so large that it threatens to collapse both the U.S. health care system and the entire U.S. economy.

 
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German FinMin Warns "I Never Said The Euro Crisis Was Over"





Following on the heels of Merkel's adviser Lars Feld's comments, German finance minister Schaeuble has raised concerns over the results of the Italian elections. His comment that,"I never said the euro crisis was over," stands in contrast to the claims of Monti, Draghi, Lagarde, Barroso, and Sarkozy who all have. along with the market's "doubts that a stable government can be formed," raises the risk of turmoil spreading to other euro countries. Schaeuble commented further that, "now it is up to those who were elected in Italy on Sunday to form a stable government. The faster they do this, the quicker the uncertainty will be overcome." The problem, as Reuters reports, appears to be not just Italy's public dissension over Germany's demands for austerity but his French counterpart's comments that "austerity has gone far enough," to which the German rebuked, "France must also do more here, Hollande knows this and so does Pierre Moscovici." Tension is certainly rising in the depression-addled union, even as Draghi explains - it's all ok, he promises.

 
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High Frequency Wallpaper: When Knight Went Dark





See if you can find when the Knight algo was turned off on August 1st 2012? Think that was a lone rogue algo? This is what our 'market' has become, as Nanex explains, a Knightmare on Wall Street...

 
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Santelli On The Securitization Of Gold





Having started trading gold futures over 30 years ago, CNBC's Rick Santelli has seen a few changes over the years. From its true high in Feb 1980 at around $2300 (inflation-adjusted), the biggest shift he and his guest have seen is the evolution of ETFs and the implicit securitization of gold. This took the 'complication' out of trading gold and enabled those who did not wish to hold physical to participate. But Santelli asks the critical question, "didn't it take the whole point away [of investing in gold]?" From the 'old days' when gold and silver were physically held and passed down and considered wealth to the current incorrect belief system of paper gold, the myth-shattering-Chicagoan exclaims to the precious metal ETF holders, "for the Ayn Rand'ers, if the financial world comes to an end, you're not going to have the gold, you're going to have a piece of paper."

 
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Tim Geithner To Hold Financial Crisis Seminars





When it comes to generating near-apocalyptic financial crises, there are few men quite as qualified as the former NY Fed and US Treasury head Tim Geithner. Which is why it is not at all unexpected that while he is drafting his tell all memoirs, which may or may not include details on why he leaked confidential market moving Fed information to Wall Street's banks, the TurboTax expert is set to take the university circuit by storm and teach young and impressionable minds about how not to do anything he did. As WSJ reports, "Former Treasury Secretary Timothy Geithner plans to hit the university circuit in the coming months, conducting a series of seminars on financial crises. Mr. Geithner, who left the Obama administration last month after four eventful years at Treasury, should have unique insights on such crises. He was president of the Federal Reserve Bank of New York and then Treasury secretary during the 2008-2009 financial meltdown. Mr. Geithner has committed to seminars at Harvard University, the Massachusetts Institute of Technology, Northwestern University, Princeton University and the University of Michigan." Surely, the future central planners of the world are already shaking with anticipation.

 
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