Olduvaiblog: Musings on the coming collapse

Home » 2013 » December » 26

Daily Archives: December 26, 2013

Peak Trash | Zero Hedge

Peak Trash | Zero Hedge.

The end of the year is peak trash season across America as the Environmental Protection Agency estimates Americans produce around 25% more waste around the holidays than other periods. As the WSJ notes, Christmas isn’t so pretty on the back end. The additional garbage—which adds up to over one million tons of waste—includes food scraps, cutlery, wine bottles, wrapping paper and Christmas trees; but Online sales add a thickening layer of refuse. In recent years, as more consumers have taken to buying online, the volume of corrugated cardboard boxes, air-filled plastic pockets and Styrofoam pellets in trash has grown. The rise is unprecedented as corrugated cardboard boxes account for as much as 50% of the paper product waste from some nearby towns, versus less than 20% a decade ago.

Via WSJ,

 the holidays also produce an ever growing pile of trash, one that is getting bigger as Americans shift more of their shopping to the Web.

David Menke, a sanitation worker in Ohio, sees it firsthand driving a garbage truck and collecting trash on the outskirts of Cincinnati. “You can tell people are buying more things online, as there are already a lot of Amazon and FedEx boxes,” said the 34-year-old.

Americans produce around 25% more waste around the holidays than other periods, estimates the Environmental Protection Agency.

Online sales in the U.S. this year are forecast to grow 15% to $78 billion, according to technology researcher Forrester Research Inc….The U.S. Postal Service expects to ship a record 420 million packages between Thanksgiving and New Year’s, an increase of 12% from last year.

At Atlantic Coast Fibers LLC, a New Jersey recycling company, corrugated cardboard boxes account for as much as 50% of the paper product waste from some nearby towns, versus less than 20% a decade ago.

“A lot of that is the result of e-commerce,”said Allan Zozzaro, who runs a materials-processing division of Atlantic Coast. And after buying online, people get more catalogs in the mail from retailers, adding to the waste, he said.

Some retailers in recent years have tried to cut down on box sizes and materials to reduce waste. Amazon now sells some toys and consumer products in what it calls “frustration-free packaging,” which enables some items to be delivered in their own packaging without an additional shipping box. Still, shoppers say boxes they receive are sometimes too large or have a lot of filler material.

“There are lots of plastic bags filled up with air, and sometimes giant boxes,” Ms. Skeuse said.“It’s a lot of waste.”

 

 

100 Years Of Success? – Fed ‘Inflation’ Style | Zero Hedge

100 Years Of Success? – Fed ‘Inflation’ Style | Zero Hedge.

Money is only as useful as to what it can purchase. The Fed has created a system where debt is now equal to money.  This is why big purchases like cars, housing, and even going to college are only feasible by mortgaging your future for many decades. Since the payments are broken down into tiny monthly installments many people pay little attention to the true cost of things over their lifetime. Yet, as MyBudget360 shows, over time, the U.S. dollar has lost a tremendous amount of purchasing power due to inflation. Inflation slowly eats away at your purchasing power yet having access to debt has given the middle class the false impression that they are still protected from the unraveling impacts of inflation. They are not…

As MyBudget360.com goes on to note,

Someone sent over a photo posted over on the popular Reddit website that shows the cost of living for people back in 1938.  You would think that people in 2013 would have more purchasing power than those living through the Great Depression.  Adjusting for inflation you would be surprised what has happened in the last 75 years.

 

The cost of living between 1938 and 2013

The picture in question has prices for living from 1938.  It includes important items like a new home, income, new car, rent, and extreme purchasing examples like tuition for Harvard:

cost of living

Source:  Reddit

You can normalize costs over time through adjusting for inflation.  Back in 1938 a new home cost about two times the annual average income.  A new car was only about one-third the cost of the annual average income. These figures are important because back in 1938, using credit was only a small factor in purchasing goods.  Themiddle class didn’t start blossoming until after World War II so you would expect that things were still tough for regular households.  What we find though is that compared to the typical income, buying a new home or buying a car was relatively doable for most households.

Now adjusting all these figures for inflation shows how much more expensive things have become and how dependent we now are to financing purchases with debt (created by the banking system):

inflation and actual prices

 

This chart shows the impact of inflation and the declining purchasing power of the US dollar.

For example, a new home adjusting for inflation (using the BLS calculator) should cost around $64,597 per year.  The current cost of a new home?  $245,800.  The average income has stayed about the same normalizing for inflation (doesn’t say much since we are going back to the Great Depression here).  A new home today costs nearly 10 times the annual average income of a worker.  The two income trap has largely hidden this inflation since it now takes two households to accomplish what one income was able to do 75 years ago.  On top of that, people now need to go into massive debt just to purchase a home. 

 

Take a look at the cost of a new car as well. In 1938 a worker was able to purchase a new car with one-third of their annual income.  Today a new car is more expensive than the annual average income.  This is why in 2013 one of the top growing consumer debt sectors was with automobile loans.

 

If things stayed the same, the cost of attending Harvard for one year in 2013 would be closer to $7,000 per year (the current tuition is $54,496 per year).  It isn’t only Harvard charging incredibly high tuition around the country.  Of course the higher education bubble is one of the most pressing issues around creating a$1.2 trillion student debt market.

 

Rent, movie tickets, and even gasoline are much more expensive today adjusting for inflation.  This puts a heavier strain on the pocketbook of most Americans.  It also has created a dependency on debt.

 

We do have stronger safety nets so we don’t have the “in your face” poverty of the Great Depression.  Yet we still have close to 48 million Americans on food stamps.  The area that has seen prices become more affordable is with food.  This however is largely derived from better access to food and products and the mass production of this commodity.  Yet the bigger costs of living in housing, cars, rent, and going to college are all much more expensive today.  It may feel cheaper to some if they only look at their monthly debt payment but the true costs have increased.

As Jim Quinn (of The Burning Platform blog) so eloquently sums up,

Who benefits?

 

Bankers!!!!

 

Debt peddlers win when income doesn’t keep up with costs and media propagandists convince the masses they must have what they can’t afford.

 

Has the Federal Reserve created inflation benefited you in any way whatsoever? Lucky for Ben, Janet and the rest of the Wall Street cabal the average American can’t make change from a one dollar bill, let alone grasp the concept of inflation. The government education system has done its job, just as our owners desired.

 

Remember – inflation is well contained. Ben is still worried that it is too low.

Know your enemy.

 

 

Local courts reviving ‘debtors’ prison’ for overdue fines, fees | Fox News

Local courts reviving ‘debtors’ prison’ for overdue fines, fees | Fox News.

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new “debtors’ prison” — referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

Reforms eventually outlawed the practice. But groups like the Brennan Center for Justice and the American Civil Liberties Union say it’s been reborn in local courts which may not be aware it’s against the law to send indigent people to jail over unpaid fines and fees — or they just haven’t been called on it until now.

Advocates are trying to convince courts that aside from the legal questions surrounding the practice, it is disproportionately jailing poor people and doesn’t even boost government revenues — in fact, governments lose money in the process.

“It’s a waste of taxpayer resources, and it undermines the integrity of the justice system,” Carl Takei, staff attorney for the ACLU’s National Prison Project, told FoxNews.com.

“The problem is it’s not actually much of a money-making proposition … to throw people in jail for fines and fees when they can’t afford it. If counties weren’t spending the money jailing people for not paying debts, they could be spending the money in other ways.”

The Brennan Center for Justice at New York University’s School of Law released a “Tool Kit for Action” in 2012 that broke down the cost to municipalities to jail debtors in comparison with the amount of old debt it was collecting. It doesn’t look like a bargain. For example, according to the report, Mecklenburg County, N.C., collected $33,476 in debts in 2009, but spent $40,000 jailing 246 debtors — a loss of $6,524.

Fines are the court-imposed payments linked to a conviction — whether it be for a minor traffic violation like driving without a license or a small drug offense, all the way up to felony. Fees are all those extras tacked on by the court to fund administrative services. These vary from jurisdiction to jurisdiction, with some courts imposing more than others.

As states and counties grapple with shrinking budgets and yearly shortfalls, new fees are often imposed to make up the difference, though they can be quite overwhelming to individuals passing through the system — 80 percent of whom qualify as indigent (impoverished and unable to pay), according to the Brennan Center. Florida, for example, has added 20 new fees since 1996, according to the center. North Carolina imposes late fees on debt not paid and surcharges on payment plans.

More and more, courts are dragging people in for fines and fees that have ballooned due to interest imposed on the initial sums. Some owe money to the public defender’s office for the representation they received during their time in court. Others incur hundreds of dollars in fees while they’re incarcerated — for everything from toilet paper to the beds inmates sleep on.

The tab for the average offender could be as low as $250 or as high as $4,000. Both the ACLU and Brennan have been targeting big states with multiple jurisdictions they say are flouting U.S. Supreme Court rulings in 1970, 1971 and 1983. Those rulings essentially say courts cannot extend or impose a jail sentence for unpaid fines and fees if individuals do not have the ability to pay.

At the very least, according to the high court, the courts must inquire and assess whether a person is indigent and might benefit from an alternative method of payment, like community service, before sentencing.

“Even though a lot of jurisdictions do have statutes on the books that allow judges to waive fines and fees, it doesn’t always happen,” explained Lauren Brooke-Eisen, counsel for the Brennan Center’s Justice Program.

Much of the time, probation or the conviction itself will hinder individuals from finding employment (Brennan estimates that some 60 percent are still unemployed a year after leaving jail). But another incarceration over debt could either ruin the job they managed to get or make it even harder to find one.

Many jurisdictions have taken to hiring private collection/probation companies to go after debtors, giving them the authority to revoke probation and incarcerate if they can’t pay. Research into the practice has found that private companies impose their own additional surcharges. Some 15 private companies have emerged to run these services in the South, including the popular Judicial Correction Services (JCS).

In 2012, Circuit Judge Hub Harrington at Harpersville Municipal Court in Alabama shut down what he called the “debtors’ prison” process there, echoing complaints that private companies are only in it for the money. He cited JCS in part for sending indigent people to jail. Calling it a “judicially sanctioned extortion racket,” Harrington said many defendants were locked up on bogus failure-to-appear warrants, and slapped with more fines and fees as a result.

Repeated calls to JCS in Alabama and Georgia were not returned.

Defenders of the collection programs say the money is owed to the state and it’s the government’s right to go after it. “When, and only when, an individual is convicted of a crime, there are required fees and court costs,” Pamela Dembe, president of the First Judicial District of Pennsylvania, which oversees Philadelphia, said in a statement to reporters in May. An earlier review by the courts found an estimated 400,000 residents owed the city money. “If the defendant doesn’t pay, law-abiding taxpayers must pay these costs.”

Meanwhile, there’s evidence that groups like the ACLU are prompting reforms.

For example, the ACLU released “The Outskirts of Hope,” on court practices in Ohio. The report told the story of one couple, John Bundren and Samantha Reed, who both had racked up court fines. Bundren’s, which traced back to underage drinking and public intoxication convictions from his teenage years, totaled $3,000. They paid her fines before his, and Bundren ended up spending 41 days in jail because he couldn’t pay his own.

The ACLU found that seven out of 11 counties they studied were operating de facto debtors’ prisons, despite clear “constitutional and legislative prohibitions.” Some were worse than others. In the second half of 2012 in Huron County, 20 percent of arrests were for failure to pay fines. The Sandusky Municipal Court in Erie County jailed 75 people in a little more than a month during the summer of 2012. The ACLU says it costs upwards of $400 in Ohio to execute a warrant and $65 a night to jail people.

As a result of the study, the Ohio State Supreme Court has begun educating judges and personnel on the statutes and constitutional restrictions of collecting fines and fees, Bret Crow, spokesman for the state court, told FoxNews.com. It is also developing a “bench card,” intended as a reference guide for county judges.

More recently in Colorado, the state ACLU completed a report on “pay or serve” programs throughout the state. In the case of Wheatridge and Northglenn counties, the penalty was one day in the clink for every $50 owed; in Westminster, every offender got an automatic 10 days in jail.

The report also found that one jail racked up more than $70,000 in costs for incarcerating 154 people over a five-month period in 2012 — and only managed to collect $40,000 in overdue fines and fees in that time.

Mark Silverstein, a staff attorney at the Colorado ACLU, claimed judges in these courts never assess the defendants’ ability to pay before sentencing them to jail, which would be unconstitutional.

John Stipech, Municipal Court judge in Westminster, Colo., told FoxNews.com he agreed with the tenets of the ACLU investigation, but added that the practice of the automatic 10-day jail sentence was already scrapped by Westminster in December 2012. “It was because we had jail space problems and beds needed to be limited to actual criminals,” he said.

He complained that local coverage of the ACLU report “makes it sound like we’re putting everyone in jail.” He said he asks everyone who comes before him if they have the ability to pay. He acknowledged, however, that his court is working with the ACLU and will be instituting formal “show cause” hearings to determine indigence.

“Maybe the ACLU did some good, they brought it to my attention. Maybe they just should have done it in a better way,” Stipech said.

Brooke-Eisen said the reform movement is proceeding, albeit slowly in tough fiscal times.

 

U.N. Asks U.S. To Justify Latest “Cruel, Inhuman” Drone Attack That Killed 15 Yemen Civilians In A Wedding | Zero Hedge

U.N. Asks U.S. To Justify Latest “Cruel, Inhuman” Drone Attack That Killed 15 Yemen Civilians In A Wedding | Zero Hedge.

Imagine, if you will, that you and your 15 closest unarmed, civilian friends are celebrating a young couple who has just started their lives together, and are on your way to their wedding party, when all of a sudden a remote-controlled US killing machine drops several air-to-surface tactical missiles on your group and kills you before you have a chance to blink. Macabre as it sounds, this is precisely what happened in the conflict-torn (courtesy of the CIA) republic of Yemen last month when a US drone mistakenly killed 15 people.

The US justification: the 15 civilians were mistaken for an Al Qaeda convoy (good thing this was not in Syria, where such an Al Qaeda convoy would have received US arms and funding), and in keeping with the US “superpower” walkthrough, the missiles were launched first, and questions would be asked later if ever. And while this happens daily around the globe (remember: they hate America for its freedoms, not because it rains hellfire on civilians without reason), this time the United Nations human rights watch actually had the temerity of calling out the US on its latest act of mass murder.

Reuters has the full story:

United Nations human rights experts told the United States and Yemen on Thursday to saywhether they were complicit in drone attacks that mistakenly killed civilians in wedding processions this month.

The independent experts questioned the legitimacy of drone attacks under international law and said the governments should reveal what targeting procedures were used.

Local security officials said on December 12 that 15 people on their way to a wedding in Yemen were killed in an air strike after their party was mistaken for an al Qaeda convoy. The officials did not identify the plane in the strike in central al-Bayda province, but tribal and local media sources said that it was a drone.

Stressing the need for accountability and payment to victims’ families, the U.N. statement issued in Geneva said that two attacks, on two separate wedding processions, killed 16 and wounded at least 10 people.

If armed drones are to be used, states must adhere to international humanitarian law, and should disclose the legal basis for their operational responsibility and criteria for targeting,” said Christof Heyns, U.N. special rapporteur on extrajudicial, summary or arbitrary executions.

Poor Yemen, unclear that others’ sovereignty does not matter to the US, voiced a feeble protest: “Yemen cannot consent to violations of the right to life of people in its territory,” he added.” Good luck with non-consenting.

However, it was the UN that surprised onlookers with one of the harshest condemnations of what is essentially unaccountable murder by an American remote-control plane, controlled from thousands of miles away:

Juan Mendez, U.N. special rapporteur on torture, voiced concern about the legitimacy of the airstrikes. Each state was obliged to undertake due investigation into the reported incidents, including their effect on civilians, he said.

A deadly attack on illegitimate targets amounts to cruel, inhuman or degrading treatment if, as in this case, it results in serious physical or mental pain and suffering for the innocent victims,” Mendez said.

Wait, so cruel, inhuman and degra…. oh look, another all time high for the S&P! Quick BTFATH, and ignore all this irrelevant “stuff.”

 

Albert Einstein: “A Foolish Faith In Authority Is The Worst Enemy Of The Truth” Washington’s Blog

Albert Einstein: “A Foolish Faith In Authority Is The Worst Enemy Of The Truth” Washington’s Blog.

Don’t Be Foolish

Albert Einstein said:

A foolish faith in authority is the worst enemy of the truth.

Indeed, scientists have shown that people will go to absurd lengths – and engage in mental gymnastics – in order to cling to their belief in what those in authority have said.

Part of the reason so many are so vulnerable to naive belief in authority is that we evolved in small tribes … and we assume that the super-elites are just like us.

In reality, there are millions of psychopaths in the world … and they are largely running D.C. and on Wall Street.

These people have no hesitation in lying to promote their goals.

The Assistant Secretary of Defense for Public Affairs told Morley Safer of 60 Minutes and CBS News:

Look, if you think any American official is going to tell you the truth, then you’re stupid. Did you hear that? — stupid.

And studies show that the super-rich lie, cheat and steal more than the rest of us.

Who’s to Blame … Big Government or Big Business?

Conservatives tend to believe that the captains of industry are virtuous and that the government can’t be trusted.

Liberals tend to believe that government servants are virtuous and that corporations can’t be trusted.

But the truth is that psychopaths are psychopaths … whether they’re in the private sector or government.

And there is no such thing as representative government or free market capitalism anymore. Big corporate money has coopted the government; and ill-guided politicians have destroyed the free market.

Corrupt government agencies and officials and corrupt corporations and executives have become intertwined in a malignantsymbiotic relationship.

And they’re trying to grab more and more power and wealth every day.

Big Business Has Turned Into a Criminal Syndicate

Big banks and giant oil companies have more or less become criminal enterprises.

And conservatives are not amused.

Government Has Gone Rogue

If the government were accountable, then government corruption, deceit and wrongdoing would be held to a modest level.

But the government is not accountable.

When bad government policy leads to bad results, the government manipulates the data … instead of changing policy.

Government pumps out massive amounts of propaganda through the mainstream and “gatekeeper” alternative mediamoviesvideo games, and other venues.

The government has launched a war on journalism, and censors and manipulates social media. And see this.

The massive NSA is spying on all of us – including government officials, reporters, and everyone else – as a way to crush dissent.

And people who criticize government policy or government officials may literally be labeled terrorists.

No wonder the American public has lost faith in the 2 party system. And see this.

People of faith shouldn’t be fooled into blindly deferring to government authority.

 

The Man Who Predicted the Future for BP Says Peak Oil Is Nigh | Motherboard

The Man Who Predicted the Future for BP Says Peak Oil Is Nigh | Motherboard.

By Brian Merchant

One of the more famous portraits of peak oil. Image: Wikimedia

In a year that saw the United States reach near-historic levels of fossil fuel production, it seemed that the words ‘peak oil’ were scarcely uttered. But it’s still a looming question, that we have yet to satisfactorily answer—when are we going to run out of oil? Have we already started to? A renowned geologist, and a former top analyst for BP no less, says the answer is yes.

“We are probably in peak oil today, or at least in the foot-hills,” Dr. Richard Miller said recently at a talk in London. According to the Guardian, Miller “prepared BP’s in-house projections of future oil supply for BP from 2000 to 2007,” and is bringing peak oil back into focus at the end of a petroleum-soaked year. He says that oil production has already peaked in 37 oil-producing countries, and that global production is declining at about 3.5 million barrels every year. Continued reliance on oil, and the coming shortage, will do nothing less than “break economies.”

Per the Guardian

“We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply… New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover– but production is still falling at 4.1% p.a. [per annum].”

Bottom line being, oil companies and governments are jazzed on new technologies and extraction techniques like fracking and tar sands—Exxon and co are running shiny ads touting domestic energy production—but none of that changes the fact that oil is running out. We’re getting better at scraping the bottom of the barrel, but you can only get so much.

“Production of conventional liquid oil has been flat since 2008,” Miller said. “Growth in liquid supply since then has been largely of natural gas liquids [NGL]—ethane, propane, butane, pentane—and oil-sand bitumen.”

Add Miller’s warnings to a long list of geologists, economists, and environmentalists who say we’re outrunning our dependence on the black gold. In 2008, the Germany-based Energy Watch Group proclaimed “peak oil is now.” In 2005, a group of respected geologists and physicists started the Oil Drum, and warned that demand had begun to outpace production. Their prognosis was repeatedly vindicated.

In 2009, the UK Energy Research Centre concluded that “A global peak is inevitable. The timing is uncertain, but the window is rapidly narrowing.” And even the US Department of Defenseforecast a shortage of oil as soon as 2015.

Which is to say, Miller finds himself in some pretty sterling company, and in a year where the nation had fossil fuels on the brain, his cautions are especially worth considering.

 

UK braced for more storms and floods | UK news | theguardian.com

UK braced for more storms and floods | UK news | theguardian.com.

Flooding in Maidstone

Flooding in Maidstone, Kent: about 1,000 homes in south-east and south-west England have been flooded and at one stage 300,000 properties were without power. Photograph: Matthew Aslett/Demotix/Corbis

Weather forecasters are warning that more storms could cause further significant flooding in parts of southern England on Thursday as more than 10,000 properties remain without power.

About 1,000 homes in south-east and south-west England have already been flooded and at one stage 300,000 properties in the south-east, the east of England and London had no electricity as bad weather threw many people’s Christmas celebrations into chaos.

The Met Office said widespread gales were likely to develop late during Thursday night or in the early hours of Friday morning bringing gusts of more than 50mph inland and of 70mph to 80mph to some coastal areas and high ground. On Thursday morning, the Environment Agency had 83 flood warnings in place, the bulk of them in the south-east (37), south-west (16), and the Midlands (18).

A Met Office spokesman said: “The public should be aware of the potential for disruption, especially where the high winds are combined with heavy rainfall.”

He said a deep area of low pressure developing over the Atlantic Ocean would bring more wet and windy weather across the UK as it tracked north-eastwards past north-western Britain later on Thursday and during Friday.

“Peak winds are thought most likely to occur during the early hours of Friday and Friday morning with the highest gusts probably being over Irish Sea coastal areas,” he said.

There was some consolation as he said the likely impact was presently thought to be “less severe” relative to other recent storms to have hit the UK.

The Energy Network Association said 13,000 properties remained without power on Thursday morning after 50,000 had no supplies on Christmas Day.

UK Power Networks, which delivers power to about 8 million customers in the south-east, the east of England and London, said that by Thursday morning there were around 8,000 without power in the area.

The director of customer services, Matt Rudling, said: “All our efforts today remain fully focused on reconnecting power supplies in the quickest way possible. Extra staff are on duty, many of whom have cancelled their leave to help with the repair effort or to join our additional call centres. We know this is a very difficult time for our customers and we want to thank them for their understanding.”

The bad weather also hampered the annual Christmas getaway. Some of the most chaotic scenes were at Gatwick airport, where a power outage at its north terminal led to more than 35 cancellations and long delays. Police stepped in to calm angry passengers. The Civil Aviation Authority (CAA) has said it may launch an investigation into the problems, which came two months after flights were hit by an earlier storm.

A CAA spokesman said: “We need to know exactly what happened at the airport. Once we have that information we can decide if there is any further action we need to take.”

The airport said heavy rain caused flooding from the River Mole into airfield substations and the north terminal.

 

Why are so many laws and rules being thrown out? | Zero Hedge

Why are so many laws and rules being thrown out? | Zero Hedge.

The biggest problem facing investors today is that “the rules” of the game change almost every year.

 

What I mean is that any basic rule investors took for granted could be thrown out the window. Indeed, in the last five years we’ve seen:

 

1)   Accounting standards at financial institutions suspended.

2)   Capital requirements for banks (Basel III) postponed multiple times.

3)   Fraud go unpunished.

4)   Obvious insider trading amongst political officials and banking insiders.

5)   Central bankers openly admit that they will lie to investors.

 

Why are so many laws and rules being thrown out?

 

The Powers That Be are committed to propping the system up by any means possible.

 

Consider Spain.

 

Spain’s banking system, by any reasonable analysis, is totally bankrupt.

 

The reason for this is that Spanish banks are all packed to the brim with garbage assets (mortgage loans and Spanish Government bonds… which aren’t worth the paper they’re printed on).

 

Consider the story of Bankia.

 

Bankia was formed by merging seven bankrupt regional Spanish banks in 2010.

 

The new bank was funded by Spain’s Government rescue fund… which received “preference shares” in return for over €4 billion (from taxpayers).

 

These preference shares were shares that a) yielded 7.75% and b) would get paid before ordinary investors if Bankia failed again. So right away, the Spanish Government was taking taxpayer money to give itself preferential treatment over ordinary investors.

 

Indeed, those investors who owned shares in the seven banks that merged to form Bankia lost their shirts. They were wiped out and lost everything.

 

Bankia was then taken public in 2011. Spanish investment bankers convinced the Spanish public that the bank was a fantastic investment. Over 98% of the shares were sold to Spanish investors.

 

One year later, Bankia was bankrupt again, and required the single largest bailout in Spain’s history: €19 billion. Spain took over the bank and Bankia shares were frozen on the market (meaning you couldn’t sell them if you wanted to).

 

When the bailout took place, Bankia shareholders were all but wiped out, forced to take huge losses as part of the deal. The vast majority of them were individual investors (the bank currently faces a lawsuit for over 140,000 claims of mis-selling shares).

 

So that’s two wipeouts in as many years.

 

The bank was taken public a year a second time later in May 2013. Once again Bankia shares promptly collapsed, losing 80% of their value in a matter of days. And once again, it was ordinary investors who got destroyed.

 

Indeed, things were so awful that a police officer stabbed a Bankia banker who sold him over €300,000 worth of shares (the banker had convinced him it was a great investment).

 

Which brings us to today.

 

Bankia remains completely bankrupt. But its executives and the Spanish Government continue to claim that things are improving and that the bank is on the up and up. Indeed, just a few weeks ago, the Wall Street Journal wrote an article titled “Investors Show Interest in Bankia.”

 

The story featured a quote from Spain’s Finance Minister that, “… it is logical. The perception of Spain has improved and Banki has improved a lot.”

 

Bear in mind, this is a bank that has wiped out investors THREE times in the last THREE YEARS. So that’s three different rounds of individual investors being told that Bankia was a great investment and losing everything.

 

Every single one of these wipeouts was preceded by both bankers and Spanish Government officials claiming that “everything had been fixed” and that Bankia was a success story.

 

And now the Spanish Government is trying to convince them to line up for a fourth round.

 

This kind of fraud and lawlessness is unbelievable to me. But it is indeed how the world works today. Those who have power will do anything they can to retain it. This includes, lying, cheating, and stealing.

 

And while certain items relating to this story are unique, the morals to Bankia’s tale can be broadly applied across the board to the economy/ financial today.

 

Those morals are:

 

1)   Those in charge of regulating the system will lie, cheat and steal rather than be honest to those who they are meant to protect (individual investors)

2)   Any financial problem that surfaces will be dealt with via fraud or lies rather than taking a hit. This will include short selling bans, stocks being frozen, bail-ins, and worse.

3)   When the inevitable collapse finally does hit, it will be individual investors and the general public who get screwed.

 

For a FREE Special Report outlining how to profit from bear market crashes and bull market runs, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards

Phoenix Capital Research

 

Bug Bites Cut Florida Orange Crop to Lowest in 2 Decades – Bloomberg

Bug Bites Cut Florida Orange Crop to Lowest in 2 Decades – Bloomberg.

A gnat-sized insect, the Asian citrus psyllid, forced Dean Mixon to replace about 1,000 orange trees in the past two years on the 50-acre Florida farm his grandfather started in the 1930s. The bug spreads a disease called citrus greening, causing fruit to shrink and drop early.

“This is the worst we ever had to deal with,” said Mixon, 62. “Young trees can’t develop strong roots, and the quality of the fruit is also affected. We have been able to slow the spread of the disease, but not eradicate it.”

Florida, the world’s largest orange grower after Brazil, will harvest 121 million boxes of the fruit in the season that began Oct. 1, the fewest since 1990, the U.S. Department of Agriculture estimates. Orange-juice futures in New York will rally 18 percent to $1.6465 a pound by the end of June, up from $1.39 on Dec. 24, according to the average estimate of nine traders and analysts surveyed by Bloomberg News.

Futures entered a bull market this month as dry weather compounds the damage from citrus greening. Some types of oranges, including early and mid-season varieties, are projected to drop prematurely from trees at the highest level since 1961, the USDA said Dec. 10. The shrinking crop may boost costs for companies including Pepsico Inc. (PEP), the maker of Tropicana juices, and Coca Cola Co., which sells Minute Maid and Simply Orange brands. U.S. consumers spend about $1.45 billion on the juice annually.

‘Uncharted Territory’

“We’re in uncharted territory,” said John Ortelle, who has been following the industry for more than 30 years and is vice president for McKeany-Flavell, an Oakland-California based broker whose clients have included Dole Food Co. and Kraft Foods Group. “Whatever producers have tried to tackle the disease has had a minimal effect so far. Growers took out trees and added extra nutrients. You just don’t know when and if the effects will be positive.”

Orange juice rose 18 percent this year on ICE Futures U.S. in New York, trailing only natural gas and cocoa among the 19 raw materials tracked by the Thomson Reuters/Jefferies CRB Index, which declined 4.1 percent. The MSCI All-Country World Index of equities rose 19 percent, while the Bloomberg Treasury Bond Index fell 3.2 percent. The Bloomberg Dollar Index, a gauge against 10 major trading partners, rose 3.8 percent.

Growing areas in Florida received as little as 2 inches (5.1 centimeters) of rain from Oct. 1 through Dec. 22, according to Kyle Tapley, a meteorologist with MDA Weather Services in Gaithersburg,Maryland. That compares with the 30-year average of as much as 8 inches. About 28 percent of the state is experiencing “abnormally dry” weather, according to the U.S. Drought Monitor.

Smaller Fruit

Last season, the USDA cut its production outlook seven times over eight months as drought compounded damage from greening. Smaller fruit size may mean that the final count for this year’s crop will total 115 million boxes, or 5 percent less than the government estimates, said Jerry G. Neff, a branch manager for Bradenton, Florida-based Allendale Risk Management Inc. who was the most-accurate forecaster in a Bloomberg survey before the USDA’s Dec. 10 report. A box weighs 90 pounds (40.8 kilograms).

Greening has discouraged growers from increasing production as new trees must be sown in greenhouses rather than outdoors to avoid further contagion, doubling the cost of planting to about $8 a tree, according to Tom Spreen, a retired University of Florida professor and an industry consultant. The area planted with orange groves will total 459,311 acres this year, the lowest since at least 1978, when the government data begins. The USDA survey was conducted every two years until 2009, when it became annual.

Consumer Demand

Acreage declines have also been spurred by increases in housing development and urban sprawl, said Mixon, whose 50-acre farm in Bradenton, Florida, is down from 350 acres in 2006.

Slowing U.S. consumption may cap price gains for futures, according to Judy Ganes-Chase, the president of J. Ganes Consulting in Panama City, Panama. U.S. retail prices for frozen, concentrated orange juice reached $4.7026 a pound by the end of November, down 5.9 percent from a year earlier. The cost is up 28 percent from a decade ago, threatening consumer demand, Ganes said.

Since Oct. 1, retailers sold 82.39 million gallons as of Nov. 23, down 6.7 percent from a year earlier, the Florida Department of Citrus estimated on Dec. 9, citing data from Nielsen Co. U.S. inventories of frozen orange juice totaled 732.47 million pounds on Nov. 30, up 22 percent from a year earlier, government data show.

Cutting Calories

Some consumers are looking for lower-calorie options, said Ross Colbert, a global beverage-strategist at Rabobank International in New York who’s been studying the industry for more than 10 years. U.S. per-capita consumption fell to 3 gallons in 2012 from 4 gallons in 2008 and 5.5 gallons in 2000, Colbert said. An 8-ounce serving of orange juice has about 110 calories, according to the government. In the past 10 years, water consumption has increased the most among all beverages, he said.

Production of oranges in Brazil will climb 8.5 percent to 435 million boxes in the 12 months ending June 30, 2014, from a year earlier, and juice output will jump 18 percent, the USDA’s Foreign Agricultural Service said in report Dec. 16. Yields will rise 12 percent.

“Brazil could take care of any shortfall we may have in production,” said James Cordier, founder of Optionsellers.com in Tampa, Florida. “While the U.S. crop is the smallest we’ve seen in many years, sales at the retail level are still sluggish.”

Hedge Funds

Hedge funds and other large speculators are increasing bets on a price rally. As of Dec. 17, money managers raised their net-long position by 11 percent from a week earlier to 2,652 futures and options, Commodity Futures Trading Commission data show. That’s the highest in three months.

First found in Florida in 1998, the Asian psyllid thrived on the state’s temperate climate and sap collected from foliage as it spread the bacterial-disease to all 32 counties that produce oranges commercially. Greening has cost the state’s economy $4.5 billion in lost revenue and eliminated 8,200 jobs amid spending cuts since being discovered in 2005, according to the Citrus Research and Development Foundation.

The USDA said Dec. 12 it was providing $1 million for research projects aimed at combating the disease. An additional $9 million has been spent through a government research program for specialty crops. More funds may be allocated in a new farm bill currently being negotiated by lawmakers.

500,000 Trees

Rick Kress, the president of Clewiston, Florida-based Southern Gardens Citrus, has replaced about 500,000 trees since 2005 because of psyllid infestation and greening. The company has about 1.8 million trees planted on more than 16,500 acres, and can process as much as 20 million boxes of oranges per season, according to its website.

Mixon, the Florida grower, has tried fighting the insect with pesticide and increasing fertilizer use to strengthen trees. Groves have also been damaged by other crop diseases including citrus canker, which causes leaves and fruit to drop prematurely, he said.

“We use pesticide, but the problem is that if it rains, it can be washed off, or if you don’t catch the psyllid at the right time, it becomes ineffective,” Mixon said. “If you use too much pesticide, you can actually burn the fruit, which can then become useless for fresh fruit or juice.”

The risk of frost in coming months may further threaten Florida’s crop, while U.S. demand increases seasonally as consumers drink more to boost their vitamin C intake and guard against influenza, said Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis.

Brazil Stockpiles

While output is forecast to increase in Brazil, the country’s stockpiles are heading for a three-year low, the USDA’s Foreign Agricultural Service estimated on Dec. 16. At the end of June 2014, inventories will drop to 93,000 metric tons, down from 205,000 a year earlier and 474,000 tons in 2012, according to the report.

Total output of frozen concentrate in the 12 months that ended in June 2013 fell 23 percent in Brazil because of lower availability for fruit processing and low industrial yields, the USDA said. Crop diseases including greening are boosting production costs in the South American country, prompting some farmers to switch to crops including sugarcane and rubber, according to Conab, the government crop-forecasting agency.

Reduced imports from Brazil may shrink U.S. inventories that, while up from 2012, are 49 percent smaller on average this year than a decade ago, government data show.

“We’re in a serious supply problem,” said Shawn Hackett, the president of Hackett Advisors Inc. in Boynton Beach, Florida. “Citrus greening is a structural problem, and Brazil is having its own issues. There’s no way to turn this around. Prices are going to go higher.”

 

Thai anti-government protest turns deadly – Asia-Pacific – Al Jazeera English

Thai anti-government protest turns deadly – Asia-Pacific – Al Jazeera English.

The proposed introduction of an amnesty law has sparked the latest round of protests [AFP]
A Thai police officer has been killed and dozens of people wounded in clashes between security forces and opposition protesters in the capital, Bangkok, on a day the election commission urged the government to postpone February polls.More than 60 people were injured during the running battle between anti-government protesters, calling for government to resign and postponment of polls, and the police, according to the emergency services.

“He was shot in his chest and brought to hospital by helicopter,” said Jongjet Aoajenpong, director of the Police General Hospital.

“A team of doctors tried to resuscitate him for more than half an hour.”

Violence broke out as demonstrators tried to force their way into a sports stadium in the Thai capital, where representatives of about 30 political parties were gathered to register for parliamentary elections.

Scores of demonstrators, some armed with sling shots, threw rocks and attempted to break through police lines prompting the police to use rubber bullets, tear gas and water cannon.

Inside the stadium the lot-drawing process was apparently unaffected by the unrest outside the gates.

However, some election officials later left the stadium by helicopter to avoid the unrest and because protesters were blocking the exits.

The election commission said in a statement that it was urging the government to consider “postponing the elections”, citing the security situation.

“We cannot organise free and fair elections under the constitution in the current circumstances,” Election Commission member Prawit Rattanapien said at a news conference.

Government officials did not immediately answer calls seeking a response.

Amnesty law

The clashes are the first violent incident in almost two weeks of daily demonstrations on the streets of Bangkok and the worst civil disturbance since 2010, when more than 90 civilians were killed in a crackdown on anti-government protests.

This latest unrest, which has drawn tens of thousands of protesters onto the streets, has left five people dead and more than 200 wounded.

“Protesters are not peaceful and unarmed as they claimed,” Deputy Prime Minister Surapong Tovichakchaikul said in a televised address on Thursday.

“They are intimidating officials and trespassing in government buildings.”

Protesters want Yingluck to step down and they oppose the elections, due to take place on February 2, because she is seen as sure to win them.

Her brother is the former Prime Minister Thaksin Shinawatra, who was ousted in a military coup in 2006 and lives in self-imposed exile to avoid imprisonment on corruption charges.

He or his allies have won every election for the last 12 years.

In mid-October Yingluck tried to introduce an amnesty law that would have allowed Thaksin to return as a free man, a move that sparked the latest round of protests.

On Wednesday, protesters rejected a compromise from Yingluck, who announced a proposal for a national reform council. They are planning more civil disobedience and street protests to force her to resign as caretaker prime minister.

Police have not tried to arrest the ringleader, Suthep Thaugsuban, who is demanding the country be led by an unelected council until reforms can be implemented.

Protesters were on the way to the Yingluck’s residence to continue their demonstration, where about 500 police officers have been stationed.

 

%d bloggers like this: