New York State

The debut of Healthcare.gov has been probably the worst launch of a major website in history, millions of Americans are having their current health insurance policies canceled, millions of others are seeing the size of their health insurance premiums absolutely explode, and this new law is going to result in massive numbers of jobs being lost.  It is almost as if Obamacare was specifically designed to wreck the U.S. economy. Americans are going to pay far more for health care, the quality of that care is going to go down, they are going to have to deal with far more medical red tape, and thousands upon thousands of U.S. employers are considering getting rid of the health plans that they offer to employees altogether due to Obamacare.  If the U.S. health care system was a separate nation, it would be the 6th largest economy on the entire planet, and now Obamacare is going to absolutely cripple it.  To say that Obamacare is an "economic catastrophe" would be a massive understatement. Of course we were assured that it wouldn't turn out this way.

• Top China Banks Triple Debt Write-Offs as Defaults Loom (BBG)
• PBOC suspends open market operations again (Global Times)
• Eurozone bank shares fall after ECB outlines health check plan (FT)
• O-Care falling behind (The Hill)
• Key House Republican presses tech companies on Obamacare glitches (Reuters)
• J.P. Morgan Faces Another Potential Huge Payouta (WSJ)
• Yankees Among 10 MLB Teams Valued at More Than $1 Billion (BBG)
• Free our reporter, begs newspaper as China cracks down on journalists (Reuters)
• Peugeot Reviews Cost-Saving Alliance With GM (WSJ)

Behold the Wealth Effect: according to the NY State comptroller, the average NYC banker made $360,700 in 2012. This is 5.2 more than the average non-financial job in the city (i.e., all other jobs).

Public corruption, based on all the evidence, appears rampant. And the ranks of those convicted in office have swelled to absolutely unacceptable levels. State Senators as well as State Assemblymen; elected officials as well as party leaders; city council members as well as town mayors; Democrats as well as Republicans.

 

- Preet Bharara, U.S. Attorney for the Southern District of New York

It’s no surprise that New York is exceedingly corrupt. It’s a huge city, with a ton of wealth and massive income inequality. That’s basically the primary breeding ground for wide-scale corruption. However, it also comes as no surprise that the situation has gotten a lot worse in recent years. After all, NYC is the headquarters of some of the largest financial institutions in the world. As such, some of the worst actors in the recent financial collapse call the city home. The whole world watched as these criminals and shysters not only evaded criminal charges, but were also rewarded trillions of dollars of public support for their efforts. The example was set. Crime pays, and now the entire city seems to be following their lead.

We last discussed the rise of the robot (as a a replacement for human labor) six months ago, pointing to the implicit (and large) deflationary bust that this entails and nowhere is this more evident today than in Australia's outback. As Bloomberg reports, the 400-plus workers employed by Rio Tinto in the remote Pilbara region (driving train-loads of mined minerals) are the highest-paid train-drivers in the world. The decade-long mining boom down-under has sucked up skilled workers, raising wages for engineers to drivers to an average $224,000 per year - as much as a surgeon in the US. This ridiculous situation has led, unsurprisingly, to the mining companies replacing them with robot locomotives.

Earlier today, one of the most popular websites that use and promote the use of BitCoin, Silk Road, was shut down by the US government. As Reuters reports, U.S. law enforcement authorities raided an Internet site that served as a marketplace for illegal drugs, including heroin and cocaine, and arrested its owner, the Federal Bureau of Investigation said on Wednesday. The FBI arrested Ross William Ulbricht, known as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings. Federal prosecutors charged Ulbricht with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, according to a court filing. Anyone visiting the site would be greeted with the following "game over" screen.

• JPMorgan eyes $4bn ‘pay for peace’ deal (FT)
• Prosecutors Pursue Big SAC Settlement (WSJ) - in the US if you are rich enough, no crime is bad enough
• Cruz's Defiant Stand Is Also a Lonely One (WSJ); Texas senator speaks for more than 14 hours (FT)
• Iran Applies Brakes to U.S. Mideast Plans (WSJ)
• Americans in Poll Doubt Economy Rebound in Defiance of Forecasts (BBG)
• Big Banks Cut Basel III Shortfall by $112 Billion at End of 2012 (BBG) - the equivalent of 10 bridges to the Kalahari desert
• Obama’s Jabs at Russia on Syria Shows Diplomacy Tensions (BBG)
• ICAP Staff Face Criminal Charges Tied to Libor  (WSJ)
• Alibaba Is Said to Shift Target for I.P.O. to U.S. From Hong Kong (NYT)
• Home gold rush is over (Reuters)
• Conoco in landmark Alaska drone flight (FT)

• Less Tapering Becomes Tightening Credit No Matter What Fed Says (BBG)
• Yellen Is Now Top Fed Hopeful (WSJ)
• Syria - A chemical crime, a complex reaction (Reuters)
• More ECB collateral: Wrecked cruise ship Costa Concordia raised off rocks in Italy (Reuters)
• Aging Boomers Befuddle Marketers Eying $15 Trillion Prize (BBG)
• Abe Turns Pitchman, Says Japan Is Now A Buy (WSJ)
• Ex-JPMorgan Employees Indicted Over $6.2 Billion Loss (BBG)
• Barack Obama blinked first in battle for Lawrence Summers (FT)
• Berlusconi to support Italian government in video message: sources (Reuters)
• How China Lost Its Mojo: One Town's Story (WSJ)

For the second month in a row, the Empire Fed has fallen and missed expectations. At 6.29 (vs 9.1 exp), this is the lowest since May as the average workweek (down from 4.81 to 1.08) and number of employees (down from 10.84 to 7.53)  subindices fall notably. In general the index was not worse because of the effect of the six-months-outlook views (which soared 3pts to 40.6 - its highest since early 2012) when, as usual, current conditions deteriorate but offset by hopium that eventually things will get better, but even there employment (number of employees outlook down from 8.43 to 4.30) was seen as weaker.

• UN Insecptors to leave Syria early, by Saturday morning (Reuters)
• Yellen Plays Down Chances of Getting Fed Job (WSJ)
• JPMorgan Bribe Probe Said to Expand in Asia as Spreadsheet Is Found (BBG)
• No Section 8 for you: Wall Street’s Rental Bet Brings Quandary Housing Poor (BBG)
• Euro zone, IMF to press Greece for foreign agency to sell assets (Reuters)
• Brothels in Nevada Suffer as Web Disrupts Oldest Trade (BBG)
• U.S., U.K. Face Delays in Push to Strike Syria (WSJ); U.S., U.K. Pressure for Action on Syria Hits UN Hurdle (BBG)
• Renault Operating Chief Carlos Tavares Steps Down (WSJ)
• Vodafone in talks with Verizon to sell out of U.S. venture (Reuters)
• Dollar Seen Casting Off Euro Shackles as Fed Tapers (BBG)

• Opposition figure: major decisions on Syria expected within hours (Al Arabiya)
• Syria challenges U.S. to "produce the evidence" that Assad regime launched chemical attack (CBS)
• British PM says world must act on Syria, weighs response (Reuters)
• U.S. Treasury to Hit Debt Limit in Mid-October (WSJ)
• U.S. could look beyond U.N. Security Council in any Syria strike (Reuters)
• Nasdaq, NYSE at odds on outage cause as SEC seeks facts (Reuters)
• Ackman’s J.C. Penney Sale Ends Failed Saga to Agitate for Change (BBG)
• Zandi, LaVorgna, Blinder, Rattner all is one con puff piece (BBG)
• Best Buy Founder Schulze Plans Stock Sale to Diversify Assets (BBG) - "diversify assets" = dump overpriced junk
• Zero Worship: Credit-Card Firms Compete With No-Interest Transfers (WSJ)
• Len Blavatnik wins $50m in JPMorgan lawsuit (FT)
• Danone Finds Yogurt’s All Greek as Oikos Chases Chobani (BBG)

• Bankers Brace for Fed Wind-Down (WSJ)
• A Veteran Saudi Power Player Works To Build Support to Topple Assad (WSJ)
• Gunmen shoot at weapons experts' vehicle in Damascus: U.N (Reuters) - as long as it's not drones
• ECB Council Members Split in Jackson Hole Over Rate Cuts (BBG)
• Fed Officials Rebuff Coordination Calls as QE Taper Looms (BBG)
• As Egyptians Ignore Curfew, Talk of a U.S.-Brotherhood Conspiracy (NYT)
• Pipeline-Capacity Squeeze Reroutes Crude Oil (WSJ)
• Lawmakers Probe Willful Abuses of Power by NSA Analysts (BBG)
• Indictments Expected in Alleged Trading Code Theft (WSJ)
• India’s ONGC takes Africa gasfield stake (FT)
• Capital Flight Drains Reserves as Rupee, Rupiah Fall (BBG)
• Banks scale back rates business (FT)

Just too many coincidences.

• Bernanke Seeks to Divorce QE Tapering From Interest Rates (BBG)
• China launches crackdown on pharmaceutical sector (Reuters)
• Barclays, Traders Fined $487.9 Million by U.S. Regulator (BBG) - or a few days profit
• Barclays to fight $453 million power fine in U.S. court (Reuters)
• When an IPO fails, raise money privately: Ally Said to Weigh Raising $1 Billion to Pass Fed Stress Tests (BBG)
• Bank of England signals retreat from quantitative easing (FT) ... Let's refresh on this headline in 6 months, shall we.
• Russia's Putin puts U.S. ties above Snowden (Reuters)
• Smartphone Upgrades Slow as 'Wow' Factor Fades (WSJ)
• Snowden could leave Moscow airport in next few days (FT)
• New Egypt government may promote welfare, not economic reform (Reuters)

• Hilsenrising interest rates Business Feels Pinch of Swift Rate Rise (WSJ)
• Yellen Betting Defies 100-Year Jinx of Fed No. 2 Never Elevated (BBG)
• No sign of cyber leaker Snowden on flight to Cuba (Reuters)
• Back to the Future 2 is finally coming: Honda Sees ‘Flying Sports Car’ Making Profit by Decade’s End (BBG)
• Europe’s Richest Person Kamprad to Move Back to Sweden (BBG)
• Li’s Shock Treatment to China Lenders Evokes Ex-Reformer (BBG)
• In India, Gold-Related Shares Melt Down (WSJ)
• Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending (BBG)
• France warned on budget deficit  (FT)