French President Warns Of Immediate Military Intervention Hours After Reporting Soaring Unemployment | Zero Hedge
While we are sure it is just a coincidence that hours after his nation reports record and soaring unemployment rates, French President Hollande announces a doubling of troops in Central African Republic (CAR) deciding to “intervene immediately” after the UN authorization, adding “this intervention will be quick. It has no vocation to last and I’m sure it will be a success,”
- *FRANCE HAS DUTY TO INTERVENE, HOLLANDE SAYS
- *HOLLANDE SAYS CENTRAL AFRICA MASSACRES CONTINUING
- *HOLLANDE SAYS SITUATION CENTRAL AFRICA `ALARMING, FRIGHTENING’
The US State Department “welcomes France’s decision to reinforce its military presence,” adding that, the US is “appalled by today’s reports of the murder of innocent women and children outside of Bangui.”
Of course, it wouldn’t be the modern-day war without drones, and as IB Times reports, a fleet of five unarmed drones will help U.N. troops monitor the vast Central African country of 66 million people, which has been plagued by violent militias for decades.
Hollande… (via DPA),
French President Francois Hollande said Thursday he had decide to intervene “immediately” in the Central African Republic, after the United Nations authorized an intervention by African and French forces.
France would double its current troop deployment of 600 “within a few days, if not a few hours,” Hollande said in an address from the Elysee Palace.
“This intervention will be quick. It has no vocation to last and I’m sure it will be a success,” he said, pledging to regularly brief the nation on its progress.
Hollande emphasized that France would be acting “together with Africans and the support of European partners” and assured that the country has “no other objective than to save human lives.”
From the US State Dept.
The United States remains committed to supporting the international community’s efforts to find a solution that protect civilians, restores security, ensures greater humanitarian access, and puts CAR on a path back to democratic governance.
Drone use raises questions…(Via IB Times),
“Such high-technology systems allow a better knowledge of what is happening on the ground, which allows a force to better do its job,” said Hervé Ladsous, U.N. Under-Secretary-General for Peacekeeping Operations.
But there are some concerns about the U.N. drone program’s transparency and regulatory framework. “Congo is in many ways a laboratory for U.N. peacekeepers with a range of equipment and a range of experiments being used,” said Phil Clark, a political professor at the University of London’s School of Oriental and African Studies, to Deutsche Welle. “But I think there are big questions here. Such as, what is it like for a non-state actor to use drones and this type of equipment, what kind of information will it be gathering, who exactly will have access to that information and what will they do with it and so I think we need a lot more clarity from the U.N. as to exactly how these drones will be used.”
As the Keynesian train rolls on, when all else fails, declare war… all that non-deflatinary ammunition production and waste…
Three ex-General Electric traders are seeing the outside sooner than anyone expected after their convictions were overturned. Photographer: Daniel Acker/Bloomberg
The `GE Three’ Go Free
It wasn’t long after three former General Electric Co. executives were convicted of rigging auctions for municipal-bond investment contracts that they received the ultimate sendoff: A 7,400-word torching in Rolling Stone magazine by Matt Taibbi, the writer who branded Goldman Sachs Group Inc. with the nickname “vampire squid.”
“Someday, it will go down in history as the first trial of the modern American mafia,” Taibbi began his June 2012 opus about Dominick Carollo, Steven Goldberg and Peter Grimm. “Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.”
Then came a surprise last week, right before Thanksgiving. A federal judge ordered the men released from prison. An appeals court had reversed their convictions the day before, without explanation. An opinion would be issued “in due course,” it said. Bloomberg News ran a short story this week. The rest of the news media barely noticed.
Americans tend to like their crime stories simple: Good guys catching bad guys and sending them to jail. Nuances and complexities can complicate morality tales. The country is still baying for blood after the financial crisis. Folks want the people who they think helped crash the economy locked up and fed bread and water in place of Cristal and lobster.
The case against the former GE bankers is a reminder that high-profile financial-crime cases rarely are cut and dry. Even when prosecutors win, they still might lose later, especially if the defendants can afford top-notch appellate lawyers. Until last week the GE Three were considered criminals. Now they are innocent in the eyes of the law, and we don’t even know why yet. It’s possible that the government will appeal further and win in the end. A resolution seems far from final.
A reversal like this helps explain why some prosecutors might hesitate to bring difficult white-collar cases to trial. The Justice Department seemed to pull back from pursuing financial-crisis cases after two former Bear Stearns Cos. hedge-fund managers were acquitted of fraud charges in 2009. (One of the jurors said after their trial that she would invest with them if she had the money.) It’s easier to rack up wins by going after small fry for simpler crimes.
Carollo, Goldberg and Grimm each had been convicted on multiple counts of conspiracy to commit wire fraud. Prosecutors accused them of paying kickbacks to brokers hired by cities and towns to oversee the bidding on municipal-investment contracts, which local governments use to invest the proceeds from bond sales. Goldberg was sentenced to four years in prison. Carollo and Grimm got three years each.
Although the appeals court hasn’t yet explained its decision, the defendants claimed that the statute of limitations had elapsed by the time they were indicted in 2010. They also complained that they hadn’t been allowed to finish cross-examining one of the government’s key witnesses after he attempted suicide during a break. The government said he couldn’t return for further questioning.
What should we make of their sudden freedom? Sometimes justice is rough. Sometimes it seems random. It’s often messy. Some judges disagree with other judges’ rulings. Some crooks get pinched while others who seem guilty as sin never get charged. Mysteries abound as to why. Insider-trading cases get hot, so other frauds get put on the backburner. The government rarely explains why it chose not to prosecute someone, leaving the public to speculate.
And what are we now to make of GE’s own decision in 2011 to enter a non-prosecution agreement with the Justice Department, under which it paid $70 million? As part of that deal, GE made this admission: “From 1999 to 2004, certain former traders who bid on municipal contracts on behalf of the company entered into unlawful agreements to manipulate the bidding process on certain relevant municipal contracts, and caused the company to make payments and engage in other related activities in connection with those agreements through at least 2006.”
In other words, the company turned against its former employees. Maybe GE could have beaten the government’s rap, given that the former executives’ convictions have been overturned. We’ll never know. Even if it turns out they got off on a technicality, Carollo, Goldberg and Grimm deserve respect for having the guts to demand that the government prove its case in court. That is something large financial institutions rarely try. Perhaps more should.
One final note: The Justice Department issued news releases to trumpet the former GE executives’ indictments, convictions and sentencings. It didn’t issue a news release to say that their convictions had been reversed. That sure doesn’t look like fair play or justice to me.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)
Here Is The “Growth” – Inventory Hoarding Accounts For Nearly 60% Of GDP Increase In Past Year | Zero Hedge
As we reported earlier, while on the surface the headline revised Q3 GDP number was a stunner coming at 3.6%, the reality is that more than 100% of the growth from the initial estimate came from a revised estimate of how many private Inventories were stockpiled in the quarter. The reality was that of the $230 billion in total increase in SAAR GDP, $146 billion of this, or over 63%, was due to inventory stockpiling.
So how does inventory hoarding – that most hollow of “growth” components as it relies on future purchases by a consumer who has increasingly less purchasing power – look like historically? The chart below shows the quarterly change in the revised GDP series broken down by Inventory (yellow) and all other non-Inventory components comprising GDP (blue).
But where the scramble to accumulate inventory in hopes that it will be sold, profitably, sooner or later to buyers either domestic or foreign, is seen most vividly, is in the data from the past 4 quarters, or the trailing year starting in Q3 2012 and ending with the just released revised Q3 2013 number. The result is that of the $534 billion rise in nominal GDP in the past year, a whopping 56% of this is due to nothing else but inventory hoarding.
The problem with inventory hoarding, however, is that at some point it will have to be “unhoarded.” Which is why expect many downward revisions to future GDP as this inventory overhang has to be destocked.
Europe’s second largest economy and crucial to the core founding partnership of the euro project, France, has seen its unemployment rate rise unceasingly for 9 quarters in a row now. At 11.03%, French unemployment has not been higher since Q3 1997. Of course, President Hollande, despite falling PMIs and rising unemployment is hopeful that things are turning around as he notes, France is “now in a phase of stabilization that remains very fragile.” Some optimism can be taken from the relative stability in youth unemployment for a change but the over-50s unemployment reached an all-time high of 8.2%.
Hurricane-force winds disrupted transport and power supplies in Scotland and threatened coastal flooding in England as they closed on northern Europe in what meteorologists said could be one of the most powerful storms to hit the continent in years.
British authorities announced the Thames Barrier, designed to protect London from flooding during exceptional tides, would close on Thursday night and warned of “the most serious coastal tidal surge for over 60 years in England”. Prime Minister David Cameron called a meeting to discuss strategy.
One person was killed as winds of up to 225 km/hr slammed into parts of the Scottish highlands, Britain’s weather office said. More than 80,000 homes were left without power, according to energy company SSE.
That number was expected to rise with road connections blocked by fallen trees and debris. A lorry driver was killed and four people injured when his vehicle overturned and collided with other vehicles in West Lothian, police said.
Tidal surge predicted
All train services in Scotland were suspended shortly after 8 a.m. local time until further notice due to debris on the tracks caused by storm Xaver. Glasgow’s Central Station was evacuated after part of a glass roof collapsed, ScotRail said.
Low-lying coastal areas in eastern England were particularly vulnerable to a predicted tidal surge. Sea defences have been built up considerably since storms and flooding killed hundreds on the North Sea coast in 1953.
Authorities in Germany’s northern port city of Hamburg have issued warnings about the dangers of the winds, which some forecasters are saying could be as powerful as a deadly storm and ensuing flood that hit the city in 1962 and killed 315.
The city on the Elbe River was preparing for a direct hit by the storm on Thursday. Many schools and Christmas markets were closed as the storm neared and dozens of flights to and from Germany’s second city were cancelled.
Ferries to Germany’s North Sea islands were kept in ports.
Won’t let up
“Xaver has developed into hurricane force and it’ll be quite dangerous along the North Sea shore,” said Andreas Friedrich, a German weather service meteorologist.
“The truly dangerous thing about this storm is that the winds will continue for hours and won’t let up. The danger of coastal flooding is high.”
Friedrich said people were being advised to stay indoors across northern Germany because of the dangers such as trees being toppled and parts of roofs blown off. The weather service has issued an extreme weather warning for the northern states of Hamburg, Schleswig-Holstein, Lower Saxony and Bremen.
In Ireland, Northern Ireland Electricity said 6,500 homes were without power after severe gale force winds with gusts of 100 km/h damaged the power network while another 10,000 customers lower power but had their services restored during the night.
About The Author
Senior Washington Correspondent
Neil Macdonald is the senior Washington correspondent for CBC News, which he joined in 1988 following 12 years in newspapers. Before taking up this post in 2003, Macdonald reported from the Middle East for five years. He speaks English and French fluently, and some Arabic.
America’s rugged individualists have argued for many years that governments can’t be trusted. Turns out they were right. More so than they probably ever realized.
Municipalities, utilities and states across the U.S., faced with debts and liabilities piled up by irresponsible elected officials over the years, now want to renege.
Cities are seeking, and obtaining, permission to walk away from their commitments. State governments are simply giving themselves that permission.
And U.S. conservatives, who preach financial accountability (Bush-era Republicans saw to it, for example, that credit card debt collectors can follow ordinary Americans all the way to the grave), are not just cheering those faithless governments, but demanding that they go even further.
The shrunken city of Detroit is the latest and biggest example.
It just secured a judge’s permission to declare bankruptcy, and will now begin imposing “haircuts” on its creditors, who it appears will end up shaven nearly bald.
The most vulnerable of them are Detroit’s 23,000 retired municipal pensioners.
People like Gwendolyn Beasley, a 67-year-old who worked as a Detroit library clerk for 34 years and now collects $13,085 a year.
“I am very angry,” she tells reporters, futilely.
Michigan’s constitution, she points out, explicitly protects government pensions.
Tough luck, ruled the judge. Beasely’s pension is now in the barber’s chair.
In America’s Hunger Games economy, nothing is protected anymore.
(Except, of course, the banks and big corporations like Chrysler and General Motors that had to be rescued with tax dollars when everything crashed five years ago.)
In the state of Illinois, the legislature just passed a legislative “fix” for the $100-billion hole in its workers’ pension plan, which actually won’t come anywhere near to fixing it.
At least, though, Illinois is trying to respect the pension deals it already signed, and is focusing the financial pain on younger workers, who still have the option of finding work elsewhere and retaking control of their futures.
Illinois has also raised taxes to pay for its pensions, provoking the fury of conservatives.
The Wall Street Journal’s editorial page, scourge of taxation everywhere, blames the whole mess on greedy unions and cowardly politicians.
And in one respect, at least, the Journal is right: Of course unions are greedy, just as businessmen are greedy. Greed, otherwise known as acting in your own economic interest, is what makes the U.S. economy work.
The real villains are the politicians who agreed to labour deals they likely knew were unsustainable.
A ‘fraud’ on the public
“These jurisdictions didn’t face up to how much money they would need to put in to meet the commitments they made,” says Chester Spatt, a professor at Carnegie Mellon University and the former chief economist for the Securities Exchange Commission.
“Frankly, in other contexts, one calls that fraud.”
Politicians, who usually want to be re-elected, have a long record of incurring big debts, then walking away and leaving the mess to successors, who, if they can, then pull the same stunt.
And their pension plan advisers, anxious to please, play along.
Even now, pension funds across the U.S. are assuming “ridiculous” returns of seven and eight per cent to try to show how solvent they are, says Spatt: “It’s stunningly irresponsible.”
But as the bills arrive, politicians, especially Republicans, are choosing to demonize the victims, and it is easy to see why.
Campaigning against the rapacious clerks, teachers, librarians, police and firefighters who had the nerve to accept these pension deals has become a surefire political win.
Many voters don’t have pensions at all. Why, they ask, should government workers?
Indeed, some public servants do enjoy pensions and benefits that look shockingly generous and would be difficult to sustain without imposing higher taxes, which is definitely not a vote-getter.
The point, though, is that these workers signed deals to which governments agreed, in many cases accepting lower salaries than they would have earned in the private sector.
And they held up their end. Whatever you might think of the value of their services, they supplied them, as contracted.
More questionable debt
A deal is supposed to be a deal. But in post-crash, jobless-recovery America, what is supposed to be is not what is.
Spatt calculates the total unfunded liability of government pensions in the U.S. is probably in the trillions of dollars.
But the problem goes further than that. In fact, the vast majority of Americans, whether they realize it or not, will be looking to collect from government someday, and chances are the money won’t be there.
The Social Security system, America’s biggest pension plan, is basically broke. Successive governments have raided the Social Security fund, and shied away from increasing premiums. By some calculations, it owes $20 trillion more over the long term than it can pay.
Detroit’s bondholders – a lot of them senior citizens who purchased municipal bonds as a form of substitute pension – have now learned that not all government debt is safe.
They, along with the city’s pensioners, have reportedly been offered pennies on what they are owed.
Federal and state debt is less risky, but only because those levels of government can borrow more easily and Washington can print money. (Which, of course, has lowered interest rates and further put the screws to retirees who are getting miserable returns on their savings.)
In Detroit’s case, there is no talk of Washington stepping in, and Spatt, for one, says that is a good thing.
Not only would federal involvement set off an endless chain of government-to-government bailouts (the city of Chicago’s pension hole is $20 billion), Spatt says it would ultimately do nothing to stop irresponsible politicians from creating the same situation again.
Ultimately, says Spatt, workers must understand that pensions are risky benefits, and investors must understand that “the full faith and credit of government doesn’t mean what it used to mean.”
I would never, of course, suggest any of this would apply in Canada.
Canada, as we are all constantly told, is far more prudent and better managed, and Canadians trust their governments more.
Still, it might not hurt to take note.
The Yemeni Defence Ministry said the attack on its compound had targeted a hospital [EPA]
|A suicide bombing has rocked Yemen’s defence ministry complex in the heart of the capital Sanaa, followed by a gun battle that left many casualties, according to the Yemeni Defence Ministry.
“At least 30 people have been killed in the attack” on Thursday, including “most” of the gunmen in the firefight that followed, the ministry said in a brief statement.
The ministry said that the attackers had targeted and badly damaged a hospital inside the complex but that the situation was now under control. Foreign doctors and nurses are reported to be among the ones killed.
The suicide explosion was caused by a bomber who drove a car packed with explosives into the gate, media reports quoted the defence ministry as saying. The blast was followed by another car of gunmen opening fire at the ministry.
Plumes of smoke billowed across the complex, situated on the edge of the Baba al-Yaman neighbourhood.
There was no immediate claim of responsibility for the attack.
Yemen has been plagued with a series of violent attacks, as the interim government grapples with southern secessionists, al-Qaeda-linked groups and northern Houthi rebels, as well as severe economic problems inherited from veteran President Ali Abdallah Saleh who was forced out of office following protests against his rule in 2011.
Fighters were emboldened by a decline in government control over the country and seized several southern cities before being driven out in 2012 in an offensive supported by United States and drones.
Al-Qaeda-linked fighters have killed hundreds of Yemeni soldiers and members of the security forces in a series of attacks since then.
In July last year, a suicide bomber wearing a Yemeni army uniform killed more than 90 people rehearsing for a military parade in Sanaa. Al-Qaeda later claimed responsibility for the attack.
Yemen’s defense minister, Major General Muhammad Nasir Ahmad, escaped a car bomb on his motorcade in September 2012 that killed at least 12 other people.
Jim Rogers Cautions “Be Prepared, Be Worried, And Be Careful… This Is Going To End Badly” | Zero Hedge
“Eventually, the whole world is going to collapse,” Jim Rogers chides a disquieted CBC anchor as he explains the reality that, “we in the West have staggering debts. The United States is the largest debtor nation in the history of the world,” adding that “this is going to end badly.”
However, the co-founder of Soros’ Quantum fund is convinced that the commodity super-cycle is far from over, but driven by supply constraints (and cost increases) as opposed to demand from higher growth. The following interview provides more color on his commodity view as he re-iterates his bullish stance on Ag (with sugar a focus) and Natural Gas (some harsh natural realities coming), warning“don’t get too excited about fracking,” when he talks energy products.
Rogers, in his inimitable way, sums up the state iof euphoria that many markets find themselves in thus, “we are all floating around on a sea of artificial liquidity right now. This is not going to last.”
On the end of the commodity super-cycle:
“Commodities have pulled back, but I would remind you that in all bull markets there are periods of correction.
In 1987 – during the great bull market in stocks – stocks went down 40 to 80 per cent around the world; again in 1989, 1990, 1994, etc. Every time people said the bull market’s over, but it wasn’t. I think that’s what’s happening with commodities now.”
On the next crisis:
“2008 was so much worse than 2000 because the debt was so much higher, you wait until 2014 or 2015 when the next crisis hits…
debt has gone through the roof, the next one’s gonna be really bad“
His final words:
“Be prepared, be worried, and be careful“
On November 1st, 1961, an agreement was reached between the central banks of the United States and seven European countries to cooperate in achieving a shared, and very clearly stated, aim.
The agreement became known as the London Gold Pool, and it had a very explicit purpose: to keep the price of gold suppressed “under control” and pegged regulated at $35/oz. through interventions in the London gold market whenever the price got to be a little… frisky.
The construct was a simple one.
The eight central banks would all chip in an amount of gold to the initial “kitty.” Then they would sell enough of the pooled gold to cap any price rises and then replace that which they had been forced to sell on any subsequent weakness.
*Statement is subject to standard terms and conditions and is not necessarily reflective of any evidence. Government entities are excluded from inclusion based on the fact that we can’t really do anything about them and anyway; they could put us out of business; and it would make things really, really bad for them. Also, bullion banks are not covered under this statement because we were told to turn a blind eye; but individual investors are, and we can categorically confirm that, to the best of our knowledge, no individuals are manipulating the precious metals markets (at this time).
But, as Grant Williams explains in this excellent and complete summary of the history of Gold price manipulation, things don’t always go as planned…
Human beings, when given means and motive, have rather a poor history of eschewing the easy profit in favour of doing the right thing. Governments, when faced with dilemmas, have a rather poor history of doing the right thing as opposed to whatever they think they need to do in order to cling to power. It’s quite simple.
Libor, FX rates, and mortgages trades are all fiat in nature. The contracts that are exchanged have no tangible value. (Yes, technically speaking, mortgages have houses underneath them, but the houses are so far down the securitization chain as to be invisible). Such contracts can be created at the push of a button or the stroke of a pen and manipulated easily right up until the point where they can’t.
Gold is a different beast altogether.
The manipulation of the gold price takes place in a paper market — away from the physical supply of the metal itself. That metal trades on a premium to the futures contract for a very good reason: it has real, intrinsic value, unlike its paper nemesis.
If you want to manipulate the price of a paper futures contract lower, you simply sell that paper. Sell it long, sell it short, it doesn’t matter — it is a forward promise. You can always roll it over at a later date or cover it back at a profit if the price moves lower in the interim.
And of course you can do it on margin.
If the trading were actually in the metal itself, then in order to weaken the price you would have to continue to find more physical metal in order to continue selling; and, as is welldocumented, there just isn’t so much of it around: in recent years what little there is has been pouring into the sorts of places from which it doesn’t come back — not at these price levels, anyway.
The London Gold Pool had one thing in common with the rigging of the FX, Libor, and mortgage markets: it worked until it didn’t.
The London Gold Pool proved that central banks can collude cooperate to rig maintain the price of gold at what they deem manageable levels, but it also proved that at some point the pressure exerted by market forces to restore the natural order of things becomes overwhelming, and even the strongest cartels groups (whose interests happen to be aligned) — which are made up of the very institutions granted the power to create money out of thin air — can’t fight the battle any longer.
…The problem now is that currently there arealmost 70 claims on every ounce of gold in the COMEX warehouse and serious doubts about the physical metal available for delivery at the LBMA.
Which leads us to today…
The London Gold Pool was designed to keep the price of gold capped in an era when the world’s reserve currency had a tangible backing. In defending the price, the eight members of the Pool were forced to sell way more gold than they had initially contributed in order to keep the price from going where it desperately wanted to go — higher.
This time around, the need for the price to be capped has nothing to do with any kind of gold standard and everything to do with the defense of the fractional reserve gold lending system, about which I have written and spoken many times.
Gold is moving to ever stronger hands, and when the dam does inevitably break again, the true price will be discovered by natural market forces, free of interference.
This time, however, those chasing what little gold is available will include all those central banks that have kept their holdings “safe” in overseas vaults.
The Bundesbank has seen the writing on the wall and demanded its gold back. They were told it would take seven years before their 30 tonnes could be returned to them.
My guess is, this little scheme doesn’t have seven years left to play out.
Everybody outta the pool!
Full Grant Williams letter here: