KEEPING IT REAL Washington’s Blog
KEEPING IT REAL Washington’s Blog.
“One only needs to reflect on the dramatic decline in the value of the dollar that has taken place since the Fed was established in 1913. The goods and services you could buy for $1.00 in 1913 now cost nearly $21.00. Another way to look at this is from the perspective of the purchasing power of the dollar itself. It has fallen to less than $0.05 of its 1913 value. We might say that the government and its banking cartel have together stolen $0.95 of every dollar as they have pursued a relentlessly inflationary policy.” – Ron Paul – End the Fed
The BLS reported the CPI this morning. They tell me that inflation is well contained and has only risen by 1.2% in the past twelve months. Our beloved Federal Reserve chairman is worried inflation is too low. It is fascinating that the only people worried about inflation being too low are Ivy League educated economists and bankers whose wealth depends upon the middle class sinking further into poverty. As a person who lives in the real world, I can honestly say I like it when the things I need to buy cost less today than they did last year. When did inflation become a good thing for the average American? Our country was somehow able to grow from a fledgling new country to a world power in just over a century while experiencing mild deflation, except during times of war. The fallacy that inflation is beneficial to the common man has been peddled by bankers since 1971 when Nixon and his cronies closed the gold window and unleashed the inflationary boogeyman in the form of feckless politicians, captured Keynesian academics, and greedy soulless bankers.
It is no coincidence inflation accelerated the moment politicians, academics and bankers were unleashed to spend your money at will in order to obtain votes, Nobel prizes in economics, and ill-gotten obscene levels of wealth. David Stockman described Nixon’s dreadful sellout of the American people in his brilliant new book:
“Nixon’s estimable free market advisors who gathered at the Camp David weekend were to an astonishing degree clueless as to the consequences of their recommendation to close the gold window and float the dollar. In their wildest imaginations they did not foresee that this would unhinge the monetary and financial nervous system of capitalism. They had no premonition at all that it would pave the way for a forty-year storm of financialization and a debt-besotted symbiosis between central bankers possessed by delusions of grandeur and private gamblers intoxicated with visions of delirious wealth.” –David Stockman – The Great Deformation: The Corruption of Capitalism in America
The USD has lost 83% of its purchasing power since 1971. The moment Nixon began playing politics with the USD and bullied the Federal Reserve Chairman into pumping up the money supply prior to the 1972 election, the inflation genie got out of the bottle and led to the miserable stagflation of the 1970′s. It took extreme measures by Paul Volcker to get it back under control in the early 1980′s. Since Volcker we’ve had nothing but academics and toadies who have chosen to change the definition of inflation in order to mislead the average American regarding how badly they are getting screwed. Every refinement, tweak, adjustment, or revision to the calculation of CPI has been designed to produce a lower figure. Why control inflation when you can just change the calculation to suit your purposes?
Over the proceeding decades, the BLS has sliced and diced the CPI in such a way that they can make it say whatever TPTB want it to say. They need to keep the mushrooms (you) in the dark regarding your standard of living deteriorating, while the beneficiaries of inflation (bankers, politicians) see their standard of living soaring. They have made hedonistic “adjustments”, quality “adjustments”, substitution “adjustments” and geometric weighting “adjustments”, all with the sole purpose to reduce the level reported to the American people on a monthly basis.
CPI was supposed to measure a common basket of goods and services that Americans needed to purchase in order to live their lives. If the price for this basket rose, you had inflation. If the price for this basket fell, you had deflation. The politicians, academics, bankers and government bureaucrats decided if the price of steak went up by 10%, you would switch to chicken, therefore the price of steak did not go up by 10%. They decided if the price of a new car went up 5%, but you now had heated seats, the price didn’t really go up 5%. They now want to change to a chained CPI, which will further depress the reported figure. CPI no longer represents the increase in price of goods and services you need to live your day to day life.
Even the composition of the index doesn’t match the true cost picture for the average American. Somehow they bury the energy component within multiple categories and have the gall to argue that energy costs only comprise 9.6% of the average American expense budget. Tell that to the suburban two worker family that drives 30,000 miles per year and has to heat and cool a 2,000 square foot home. I doubt that too many families only spend 7% of their money on medical care. Housing accounts for 41% of the CPI calculation, but it is again a made up calculation called owner’s equivalent rent. Only an Ivy League economist could explain the calculation. The fact that home prices have risen by 12%, rents have risen by 4% and mortgage rates have risen from 3.25% to 4.5% in the last year somehow results in a 2.4% annual rate of inflation for housing.
If you have the feeling your standard of living has been falling for the last few decades even though your owners tell you the economy is expanding, inflation is contained, unemployment is falling, the stock market is rising, and consumer spending is growing, then you might be smarter than a 5th grader. The financial elite ruling class are counting on the dreadful public education system, along with their mainstream corporate media propaganda arms, to keep the techno-distracted math challenged masses from understanding how the financialization of the country has resulted in their demise.
Being a skeptical sort, I decided to verify the accuracy of the CPI propaganda issued by the Bureau of Lies and Scams. The combination of the internet and memories from my youth provide a powerful and accurate assessment about the truthfulness of our government. I decided to create a chart of goods and services that average Americans have spent their hard earned wages on for decades. In a matter of minutes I was able to obtain prices from 1971 for various items common to most people. I was eight years old in 1971, being raised in a middle class one earner household on the salary of a truck driver. The chart below provides the proof the government CPI data is a bad joke and the American people are the butt of that joke.
|Average Price of New Car||$3,470||$31,252||800.6%|
|Average Price of New Home||$26,000||$245,800||845.4%|
|Gallon of Gasoline||$0.36||$3.50||872.2%|
|Loaf of Bread||$0.20||$2.20||1000.0%|
|Sirloin Steak per pound||$1.19||$7.00||488.2%|
|Box of cereal 12 oz||$0.36||$3.50||872.2%|
|Pack of Cigarettes||$0.32||$6.00||1775.0%|
|College Tuition – Private||$1,832||$30,094||1542.7%|
|Baseball ticket – Phila||$2||$23||1050.0%|
|Maximum Social Security Tax||$406||$8,950||2104.4%|
|Median Household Income||$9,028||$51,017||465.1%|
|Median wage per worker||$6,497||$27,519||323.6%|
|Average Hourly Earnings||$3.60||$20.31||464.2%|
|Consumer Credit Outstanding (tril.)||$0.14||$3.07||2092.9%|
|Mortgage Debt Outstanding (tril.)||$0.51||$13.18||2484.3%|
The BLS tells me the CPI has risen by 473% since 1971. The very same agency also tells me average hourly earnings have risen by 464% since 1971. This means the average worker is earning less than they did in 1971 in real terms. The median wage per worker has lagged CPI dramatically, as the averages have been skewed by those making outrageous compensation in the financial world. Median household income has barely kept pace with inflation even though households were forced to send both parents into the workforce, with the expected consequences of higher divorce rates and children left to fend for themselves or be raised by strangers.
By the government’s own measures, the average American’s standard of living has fallen since 1971. But, we also know the government has been manipulating the CPI figure lower since the mid-1980′s. After examining the true cost increases for housing, transportation, energy, food, education and entertainment, you would have to be brain dead or an Ivy League economist to believe inflation since 1971 has only been 473%. If home prices and car prices are 800% higher, while the energy needed to power and heat them are 900% to 1,000% higher, and the cost of food is 500% to 1,000% higher, how could the CPI only be 473% higher?
There are far more people going to college today than in 1971. With college tuition 1,500% higher, how can this not be reflected in the CPI? It certainly isn’t because the education is better. Statistics show the uneducated poor are more likely to smoke. Lucky for them, cigarette prices have risen at a rate of 4 times CPI due to the government taxing the crap out of them to fund their various taxpayer boondoggles. Inflation always hurts the poor and enriches the peddlers of debt.
My dad would take me to the brand new Veterans Stadium (built for $50 million in 1971) to see the Phillies in the early 1970′s. He paid $2.00 for a general admission seat and kids got in for 50 cents. We would buy a bag of soft pretzels outside the stadium and bring them into the park. We’d get a hot dog and soda for another $1. The entire outing to see a baseball game was about $5. Today, if I wanted to bring my family of five to a Phillies game at Citizen Bank Park (built for $458 million and paid for by the taxpayer) the lowest cost for the outing would be about $200. In 1971, you could spend a vacation week at the Jersey shore for $200. Now it gets you 3 hours of watching spoiled millionaires playing a child’s game while sitting with a bunch of foul mouthed drunks.
I also found it fascinating that the most regressive tax on earth, the Social Security tax, which hammers the poor and middle class while leaving the rich virtually unscathed has gone up by 2,100% since 1971. The rate in 1971 was 5.2% and the maximum salary level was $7,800. Today, the rate is 7.65% and the maximum level is $113,700. This increased cost for every middle class American is not factored into the inflation figures. Why would the government need to increase the maximum taxable wages by 1,500% when wages have gone up by less than 500%? The hard working truck driver bears the full impact, while Jamie Dimon not so much.
So now that I’ve proved beyond a shadow of a doubt the prices of everything we need to live have far outpaced our wages and the patently false drivel published by the BLS and parroted by the MSM, what are the implications? Well that is an easy one and is summed up by the last two entries in the chart. The average American has been lured into $16 trillion of debt over the last forty years in a pathetic attempt to keep up with the Joneses. Consumer credit (credit cards, auto loans, student loans) has gone up by 2,100% and mortgage debt has gone up by 2,500%. The American people have been sold a false lifestyle dream built on easy credit by evil bankers and Madison Avenue PR maggots.
There are those who would blame the people who have chosen to live far beyond their means. They have a point. The American people certainly haven’t shown a penchant for delayed gratification, saving for the future, or consuming less than they produce. But it takes two to tango and the lead in this dance of debt has been and continues to be the Federal Reserve and their Wall Street bank owners. It’s always reasonable to ask – Who benefits? – when trying to figure out why something has happened over time. Did the American people benefit by increasing the debt owed to Wall Street banks from $650 billion in 1971 to $16.25 trillion today? I don’t think so, based upon the visible deterioration I am witnessing in my suburban paradise.
The financialization of America; where Wall Street con artists,shysters and swindlers rake in billions for shuffling paper and making risky casino bets; mega-corporations ship blue collar middle class jobs to Asia in an all out effort to increase quarterly profits; politicians spend future generations into the poor house in order to get re-elected; and the Federal Reserve purposefully creates monetary inflation to prop up the corrupt system; has systematically destroyed the working middle class and created generations of debt slaves. The American people have been foolish, infantile, and easily duped. But it is clear to me who the real culprits in our long downward spiral have been. Lord Acton stated the obvious, many years ago:
“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.” ― John Emerich Edward Dalberg-Acton
Four Out of Eight Patients Die of Mystery Illness in Montgomery County, Texas | The Daily Sheeple
Four Out of Eight Patients Die of Mystery Illness in Montgomery County, Texas | The Daily Sheeple.
Conroe Regional Medical Center where the patients are being treated
A mystery illness in Montgomery County, Texas has killed four of the eight people suffering from it, and two more are critically ill.
A report from KHOU.com quotes Dr Mark Escott, Mongomery County Medical Director as saying:
“We don’t currently have a diagnosis for what has caused those illnesses. Other health departments will need to be looking for cases like this to make sure that we haven’t missed cases.”
“Eight serious cases at a local hospital that developed with influenza-like symptoms that developed serious complications, including death for four of those eight patients. The big worry about a situation like this is, ‘Could this be a novel flu of some sort?’” Escott explained.
“It could certainly be lots of other viruses or other diseases but that is the big concern.”
All of the patients tested negative for known strains of influenza, even though they all presented with influenza-like illness. (ILI). There has been around 2000 cases of influenza-like illness in Montgomery County so far this year, but these cases are different in both severity and outcome.
All the patients have been between the ages of 41 and 68.
Dathany Reed was the youngest to die. The 41 year old took a sick day from work and went to the doctors. He came home with several prescriptions and told his mother he was feeling very unwell. The next day the father of three was on life support. He turned 41 on November 30th and died on December 5th with doctors still not knowing what killed him.
Other hospitals in the area are looking at their case loads to see if they have any patients who are undiagnosed, and that may be suffering from the mystery ailment.
Health officials are urging people to maintain hand hygiene and to cover their nose and mouth when they cough or sneeze, preferably with a disposable tissue or the crook of their arm. If people do cough or sneeze into their hands they are advised to wash them immediately.
Delivered by The Daily Sheeple
Obama review panel: strip NSA of power to collect phone data records | World news | The Guardian
Obama review panel: strip NSA of power to collect phone data records | World news | The Guardian.
The National Security Agency should be banned from attempting to undermine the security of the internet and stripped of its power to collect telephone records in bulk, a White House review panel recommended on Wednesday.
In a 300-page report prepared for President Obama, the panel made 46 recommendations, including that the authority for spying on foreign leaders should be granted at a higher level than at present.
Though far less sweeping than campaigners have urged, and yet to be ratified by Obama, the report by his Review Group on Intelligence and Communications Technology comes as the White House faces growing pressure over its so-called “bulk collection” programs from US courts and business interests.
Earlier this week, a federal judge ruled that the bulk collection program,first revealed by the Guardian in June through a court order against Verizon, was likely to be in violation of the US constitution, describing it as “almost Orwellian” in scope.
The White House was stung into releasing the report weeks earlier than expected after meeting America’s largest internet companies on Tuesday. The firms warned that failure to rebuild public trust in communications privacy could damage the US economy.
In its report, the review panel, led by former security officials and academics including the husband of one of Obama’s top advisers, said the NSA should be removed of its power to collect the metadata of Americans’ phone calls. Instead, it suggested that private companies such as phone carriers retain their customer records in a format that the NSA can access on demand.
This is likely to anger the intelligence community, which argues for direct access, but also fall foul of telephone companies, who have privately warned those drafting more ambitious reforms in Congress that such a scheme would be impractical and dangerous.
“In our view, the current storage by the government of bulk metadata creates potential risks to public trust, personal privacy, and civil liberty,” says the report. “The government should not be permitted to collect and store mass, undigested, non-public personal information about US persons for the purpose of enabling future queries and data-mining for foreign intelligence purposes.”
Despite revelations that the NSA tapped the phones of world leaders such as Germany’s Angela Merkel, the report proposes only minimal overseas reforms, merely requiring higher clearance to “identify both the uses and the limits of surveillance on foreign leaders and in foreign nations.”
On the security of the internet, the report says the US government should not “undermine efforts to create encryption standards” and not “subvert, undermine, weaken or make vulnerable” commercial security software.
NSA documents published by the Guardian in September revealed how the agency had used its central role in setting encryption standards to install backdoor flaws to intercept private traffic, causing a storm of protest among internet companies.
But the report does little to address a string other privacy breachesrevealed by NSA whistleblower Edward Snowden, and several of its recommendations deal with tighter vetting requirements for staff and contractors with access to sensitive information, designed to prevent future leaks.
The Electronic Frontier Foundation, one of the privacy advocates suing the Obama administration over the bulk surveillance, expressed disappointment with the review group report. “The review board floats a number of interesting reform proposals, and we’re especially happy to see them condemn the NSA’s attacks on encryption and other security systems people rely upon,” attorney Kurt Opsahl said.
“But we’re disappointed that the recommendations suggest a path to continue untargeted spying. Mass surveillance is still heinous, even if private company servers are holding the data instead of government data centers.”
After meeting the report’s authors on Wednesday, the White House said Obama would be taking a copy with him to read over Christmas and would decide which recommendations to accept before delivering his state of the union address on January 28.
“It’s an extremely dense and substantive exercise, which is why, in response to a 300-plus page report with 46 recommendations, we are not going to come out with an assessment five minutes later,” said spokesman Jay Carney.
Carney acknowledged there was “no question” that the Snowden disclosures had helped lead to the review process and “heightened focus here at the White House and more broadly in the administration, around the United States and the globe.”
For months, the NSA, the phone companies and reform-minded legislators have doubted the viability of having the phone companies store call data on the NSA’s behalf.
The NSA has pointed to cumbersome and varied file formats that prevent analysts from quickly searching through the companies’ data troves, particularly those proprietary to the telecos. They have also fretted that the companies only keep customer data for 18 months, while they argue they need a historical database of every domestic call going back as few as three years and as many as five.
The companies themselves fear expensive legal and technical morasses that mass data storage on behalf of the NSA may portend.
Meanwhile, civil libertarians and reform-minded legislators believe the databases themselves are problematic. Having the phone companies store them, to provide access to the NSA, is insufficient, they believe.
“Bulk collection of personal data should simply end,” said Alan Butler, an attorney for the Electronic Privacy Information Center.
It remains to be seen whether the legislators behind the USA Freedom Act, the major legislative vehicle before the House and Senate to end NSA domestic bulk call data collection, will be satisfied with the proposal. But at least one member of the House intelligence committee who has sided with the reformers, California Democrat Adam Schiff, called it a “very positive step” and urged Obama to get out in front of the coming swell of legislation.
“With the strong likelihood of congressional action, as well as a recent adverse decision by a federal district court judge, I believe the president would be well served to take the advice of the board and restructure the program as soon as possible. It would be better to have this undertaken in an orderly and expeditious fashion, than to wait for it to be compelled by the Congress or the courts,” Schiff said on Wednesday.
The White House has said Obama will not decide on which of the panel’s reforms to implement until the new year. But last week, the administration decided against one of its recommendations, that would split the NSA from the US military’s Cyber Command.
The decision was reached, White House officials said, because Cyber Command’s task of protecting US military networks from hostile attack and launching wartime online counter-attacks is too ambitious for Cyber Command, which only became operational in 2010.
Accordingly, the NSA director will remain a military general or admiral, contradicting the review group’s recommendation that a civilian should take the helm of the world’s largest spy agency.
Civil libertarian groups have been skeptical of the report for months, fearing that the White House established the insider panel to give Obama and the NSA cover to implement merely cosmetic changes. Advisers to the panel have told the Guardian since September that the panel was stopping well short of meaningful privacy reforms.
As late as Sunday, White House officials told reporters that the report would not be released until January. But in the days since, the NSA and the Obama administration have been buffeted by criticism, from a widely ridiculed 60 Minutes documentary on the NSA, to Judge Richard Leon’s scathing ruling, to the tech giants’ impatience with the surveillance agency.
The report’s authors were Richard Clarke, a former US cybersecurity adviser; Michael Morell, a former deputy CIA director; Geoffrey Stone, a University of Chicago law professor; Peter Swire, who served earlier on Obama’s national economic council; and Cass Sunstein, a Harvard law school professor who is married to UN ambassador Samantha Power.
Just before the White House released the review’s report, a different group advising Obama, the Privacy and Civil Liberties Oversight Board, which has held public hearings into the NSA for months, announced it will release two studies of its own, one into bulk collection of domestic phone data and the other into bulk foreign communications collection.
The reviews, due around late January and early February 2014, will also assess the operations of the secret Fisa court overseeing surveillance and provide “recommendations for legislative and program changes,” the board announced on Wednesday afternoon.
Egypt’s Morsi charged with ‘terrorist acts’ – Middle East – Al Jazeera English
Egypt’s Morsi charged with ‘terrorist acts’ – Middle East – Al Jazeera English.
Morsi supporters protested outside the court where the deposed president faced the initial charges [EPA]
|Egypt’s deposed President Mohamed Morsi will stand trial on charges of “conspiring with foreign groups” to commit “terrorist acts.”Morsi, toppled by the military in July and already on trial for alleged involvement in the killings of opposition protesters, was also accused on Wednesday of divulging “secrets of defence to foreign countries” and “funding terrorism for militant training to fulfil the goals of the International Organisation of the Muslim Brotherhood”, according to a prosecutor document seen by Al Jazeera sources.
Egypt’s public prosecutor ordered Morsi and 35 co-accused to stand trial on charges including conspiring with foreign organisations to commit terrorist acts in Egypt and divulging military secrets to a foreign state.
In a statement, the prosecutor said that Morsi’s Muslim Brotherhood had committed acts of violence and terrorism in Egypt and prepared a “terrorist plan” that included an alliance with the Palestinian group Hamas and Lebanon’s Hezbollah.
Some defendants, including Essam Haddad, Morsi’s second in command when president, were also accused of betraying state secrets to Iran’s Revolutionary Guards.
The prosecution also alleged Muslim Brotherhood involvement in a surge of attacks on soldiers and police following Morsi’s overthrow, centred mostly in the restive Sinai Peninsula.
Prosecutors say the intention of the attacks was to “bring back the deposed president and to bring Egypt back into the Muslim Brotherhood’s grip”.
Al Jazeera’s Peter Greste, reporting from Cairo, said the charges were tantamount to a series of very serious treason charges, which carry the death penalty in Egypt.
“I suspect a lot of Morsi’s supporters will see these as outlandish charges designed to try to sideline the opposition once and for all,” he said.
Mohamed Al Damaty, the spokesman of Morsi’s defence team told Al Jazeera that they had not seen the court documents relating to the case.
“We did not receive the court documents to this case,” he said.
“We don’t know further details and there is a gag order on this case by the prosecutor banning media from publishing its details for what they call endangering national security. No date for the trial has been set yet.”
The trial appears to stem from an investigation into prison breaks during a 2011 uprising against strongman Hosni Mubarak, when Morsi and other prisoners escaped, AFP reports.
Prosecutors have alleged the jailbreaks were carried out by Palestinian and Lebanese armed groups, who had members imprisoned under Mubarak.
Al Jazeera sources said that prosecutor copy labelled the trial as the “biggest case in Egypt’s history of conspiring against Egypt.”
According to the text, the Muslim Brotherhood had been involved in smuggling weapons and allowing its members to enter Gaza through tunnels in the Sinai to receive training from factions of Hezbollah and Iranians.
It also said members had received training on communication and dealing with media through communication with the West through Qatar and Turkey.
John Baird: Edward Snowden Should Surrender To U.S.
John Baird: Edward Snowden Should Surrender To U.S..
OTTAWA – National Security Agency leaker Edward Snowden should abandon his bid for asylum in Brazil and surrender himself to the United States, Foreign Affairs Minister John Baird said Wednesday.
Baird told The Canadian Press that Snowden’s actions have compromised global security.
“I think I probably agree with the Obama administration on this one,” Baird said. “I think he’s done significant damage to national security, of the free world.”
The U.S. wants to prosecute Snowden, who was granted temporary asylum in Russia. The move angered the Obama administration and has chilled relations between Moscow and Washington.
“The United States has a free and fair justice system,” Baird said, when asked about Snowden’s outreach to the Brazilian government this week.
“I think he should go back to the United States and face the consequences of his actions.”
Snowden’s cache of documents also suggests that Communications Security Establishment Canada once monitored Brazil’s mines and energy department and helped the U.S. and Britain spy on participants at the London G20 summit in 2009.
In an open letter earlier this week, Snowden praised the Brazilian government for standing up to the U.S. for spying on the country. He also said he could help Brazil dig deeper into the NSA activities, but that he would need to come to the country and be granted political asylum.
Snowden’s temporary asylum in Russia is to expire in August.
Snowden’s documents showed that Brazil was a prime target of the NSA in Latin America.
Reporting by the Guardian and Washington Post based on his leaked documents, detailed U.S. spying in Brazil, including the monitoring of President Dilma Rousseff’s cellphone, which led her to cancel a planned visit to Washington two months ago.
The Brazilian government appears to have no immediate plan to accommodate Snowden.
Amnesty International has called on Brazil to seriously consider Snowden’s asylum request.
Amnesty defended Snowden’s actions, saying he exposed the unlawful surveillance of private communications by the U.S. and that he might need refugee status.
“U.S. statements labelling Snowden a ‘traitor’ are prejudicial to his right to seek asylum and to his right to a fair trial,” Amnesty’s Brazil director Atila Roque said in a statement this week.
“The information he released was in the public interest and shows the remarkably invasive extent of surveillance conducted by the United States.”
Baird was dismissive, in general, of Amnesty in the Wednesday interview, suggesting the rights watchdog has lost legitimacy.
Amnesty International Canada also released a report Wednesday condemning Canada for giving short shrift to a recent United Nations review of its human rights record.
“It reflects a growing tendency to dismiss and disengage from the UN and ignore some of Canada’s international human rights obligations,” said Alex Neve, Amnesty’s Canadian secretary general.
Baird said he hadn’t read the report and wasn’t concerned about its contents, calling Canada “a beacon for the world” on human rights.
“It’s an organization that is not as strong as it used to be,” Baird said of Amnesty.
“Because they thought the government of Canada should arrest President George W. Bush and Vice President Dick Cheney. That’s silly.”
Neve called on Canada to detain and investigate Bush during an October 2011 visit to British Columbia because he admitted in his memoirs to authorizing the use of torture against terror suspects.
As for Cheney, various groups have called for him to be arrested during visits to Canada in 2011 and 2013, but Amnesty has never issued such a statement.
The Top 10 Highlights Of “Proud” Bernanke Press Conference | Zero Hedge
The Top 10 Highlights Of “Proud” Bernanke Press Conference | Zero Hedge.
While admitting that the Fed “doesn’t fully understand” all the reasons behind the slower pace of growth (though it could be due to “bad luck”), the following 10 statements from Ben Bernanke’s final press conference seemed to sum up perfectly the message he wants everyone to understand (and perhaps some he doesn’t)…
*BERNANKE REPEATS TAPERING DATA-DEPENDENT (we can always come back)
*BERNANKE INFLATION CANNOT BE PICKED UP AND MOVED WHERE WANTED (hhmm)
*BERNANKE SAYS MONETARY POLICY ISN’T A PANACEA (wait what?)
*BERNANKE SAYS ACTION TODAY INTENDED TO MAINTAIN ACCOMMODATION (ok great)
*BERNANKE SEES CONCERNS OF QE IMPACT ON ASSET PRICES (but no bubbles right?)
*BERNANKE REITERATES HE WAS ‘SLOW TO RECOGNIZE THE CRISIS’ (but you got it this time right?)
*BERNANKE SEES FED FUNDS RATE BETTER TOOL THAN QE (not for the equity markets it would seem)
*BERNANKE SAYS BIGGER BALANCE SHEET INCREASES POTENTIAL QE COSTS (indeed)
*BERNANKE FED CAN’T IGNORE FINANCIAL STABILITY IN MAKING POLICY (but chooses to)
And the money shot for success…
“It requires, obviously, some luck and some good policy.”
The Fed, The Taper & What Happens “When The Kidnapper Wears Prada” | Zero Hedge
The Fed, The Taper & What Happens “When The Kidnapper Wears Prada” | Zero Hedge.
The rich continue to grow richer, and as David McWilliams (of Punk Economics) so eloquently explains in this brief clip, this has pushed the Fed into a corner. As the Federal Reserve gets a new chair and decides what to do next, whether to print $85 billion a month more or not, McWilliams examines the heist that is the new normal financialized economy – who gets all the loot and why today’s kidnappers wear Prada. “Wake up,” he blasts, explaining the uncomfortable reality of what happens when financial kidnappers dress up as loyal patriots and extort money in the name of the common good.
“Today’s ransom is the billions of dollars in the form of QE; today’s hostage is the US economy which the kidnappers threaten to kill by a collapse in asset prices if they don’t get more and more free money… and who is paying the ransom… it is the Federal Reserve…
The message from Wall Street – the kidnapper – is: if you don’t give us what we want, we will killl the economy.”
Boomer Reality: 61…And Still Living In The Basement | Zero Hedge
Boomer Reality: 61…And Still Living In The Basement | Zero Hedge.
87-year-old Lew Manchester has just returned from a 3-week trip touring Buddhist temples in Laos and cruising the Mekong Delta in Vietnam. His 61-year-old daughter Lee lives year-round in the basement of her friend’s Cape Cod cottage, venturing into the winter cold to get to the bathroom. As Bloomberg reports, Lew is making the most of his old age. Lee is paring back and lightening her load as she looks ahead to her later years. Both worked all their lives, both saved what they could. “Timing is everything and my dad’s timing with jobs, real estate and retirement benefits was better,” said Lee. A rising tide of graying baby boomers is less secure financially and has a lower standard of living than their aged parents.
The median net worth for U.S. households headed by boomers aged 55 to 64 was almost 8 percent lower, at $143,964, than those 75 and older in 2011, according to Census Bureau data. Boomers lost more than other groups in the stock market and housing bust of 2008, and many also lost their jobs in the aftermath at a critical point in their productive years.
“Baby boomers are the first generation without the safety net of pensions and other benefits their parents have,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. “They’re facing a much more challenging old age.”
Lee said she harbors no resentment for her dad, who she credits with instilling her with a strong work ethic. “I was never allowed to dream,” she said. “My parents and then my husband expected me to work, and I couldn’t really think about what I most wanted to do.”
Lee is hardly the only baby boomer who didn’t save enough, worked for companies without 401(k) accounts or lost significant amounts in the financial crisis. Today, her retirement savings of $120,000 are right at the median 401(k) balance for households headed by baby boomers, according to 2011 data from the Center for Retirement Research at Boston College.
That will provide just $4,800 a year to boomers when they turn 65, assuming they take out 4 percent annually, the limit financial planners say should be withdrawn to assure retirees don’t run out of money in their lifetimes.
Had boomers like Lee been thriftier, they would have still been hurt by a shift to 401(k) accounts from pensions in the 1980s. Thirty-seven percent of the elderly in the U.S. collect pensions, which provide some guaranteed income until they die. Fewer than 10 percent of boomers collect pensions, and that number is quickly shrinking.
“She has never complained to me about not having enough money,” he said. “But if she needs it, I’ll advance it.”
Lee, who has repaid the money she borrowed, avoids dwelling on her difficulties during her weekly calls to her dad.
“I know he’ll help me if I fall off the ledge, but he taught me to be self-sufficient,” she said.
“It’s liberating finally getting to a point in my life where I don’t need a lot of stuff,” she said. “I felt like I was getting rid of the baggage of life that I’d kept dragging behind me and which was just weighing me down.”
Lee doesn’t regret downsizing her life. She has more time than ever to enjoy the outdoors, read and spend time with her friends.
“There’s so much pressure to keep up, to keep buying things, to stay on the treadmill always hoping to have more,” she said. “Well, less can be better.”
Guess The Smogged City | Zero Hedge
Guess The Smogged City | Zero Hedge.
Residents of this city woke on Wednesday to a third day of thick gray smog which has disrupted dozens of flights and train services and caused a rash of health complaints. As Reuters reports, the toxic levels of pollution, fuelled by industrial growth a surge in the numbers of vehicles crowding their roads, are more than 7x what the nation deems safe and what the US EPA calls “hazardous”. But it’s not in China…
Fed “Tightens”, Tapers $10 Billion – Full Redline | Zero Hedge
Fed “Tightens”, Tapers $10 Billion – Full Redline | Zero Hedge.
Despite the world of mainstream media pundits proclaiming the US is recovering nicely and that a taper is priced in (and the warning that the 5Y auction gave this morning that it’s not), markets are already reacting violently to the Fed’s decision to announce a small ‘taper’ (and more dovish forward guidance)…
- *FED TAPERS QE TO $75 BLN MONTHLY PACE, STARTING IN JANUARY
- *FED SAYS `FURTHER MEASURED STEPS’ POSSIBLE ON TAPERING
- *FED: EXCEPTIONALLY LOW RATES UNTIL JOBLESS FALLS WELL PAST 6.5%
We now leave it to Ben and his final press conference to explain his decision… and, of course, make sure everyone remembers “QE is for Main Street”, ‘tapering is not tightening’ (despite Jim Bullard telling us it is), and just how effective ‘forward guidance’ is.
Pre-FOMC: S&P Fut 1771 (spiked pre-FOMC), 5Y 1.55%, 10Y 2.875%, VIX 16.5%, Gold $1236 (which was spiking pre-FOMC), EUR 1.376
As a reminder, here are the 4 reasons why the Fed was cornered into tapering… as we have noted numerous times before; the “taper” is all about economic cover for a forced move the Fed has to make:
1. Deficits are shrinking and the Fed has less and less room for its buying
2. Under the surface, various non-mainstream technicalities are breaking in the markets due to the size of the Fed’s position (repo markets, bond specialness, and fail-to-delivers among them).
3. Sentiment is critical; if the public starts to believe (as Kyle Bass warned) that the central bank is monetizing the government’s debt (which it clearly is), then the game accelerates away from them very quickly – and we suspect they fear we are close to that tipping point
4. The rest of the world is not happy. As Canada just noted, the US monetary policy will be discussed at the G-20
Simply put, they were cornered and needed to Taper sooner rather later…
and as Jim Bullard previously noted,
“Financial market reaction to the June and September FOMC meetings provides sharp evidence that changes in the expected pace of asset purchases have conventional monetary policy effects.
Using the pace of purchases as the policy instrument is just as effective as normal monetary policy actions would be in normal times”
Or – in other words:
Tapering Is Tightening
And as BAML noted previously, forward guidance is ineffective as,
…policy makers are finding it harder to convince markets that central bankers have more insight into the future course of the economy and policy than they actually do.Meanwhile, markets are learning that it can be painful to rely too heavily on forward guidance when the risk/reward of being long fixed income is asymmetrical when close to the zero lower bound.
Full Statement redline below: