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Wednesday, July 23, 2014

Chinese Government Frets Out Loud About Property Bubble Taking Down the Economy
By Wolf Richter • July 22, 2014   

China’s economic miracle is addicted to credit, no matter what the source, that was plowed into the ground to build no matter what, houses, high-speed rail lines, forests of skyscrapers, massive industrial overcapacity, entire ghost cities….

These activities created millions of jobs and propelled GDP forward at a phenomenal pace, even if it turned out that no one would ever need that plant, live in that unfinished apartment, move to a ghost city, or shop at the deserted mall. And there might never be enough passengers to allow one or the other high-speed rail line to service the debt that was incurred to fund it.

What’s left behind is a still growing and partially hidden mountain of debt – and the threat that this contrived economic activity, this malinvestment, funded by unsustainable credit growth can’t be, well, sustained forever. That moment when it can’t be sustained any longer, when the house of cards comes tumbling down, has become a threat so serious that the government is fretting about it out loud in the Chinese media.

The Bank for International Settlements already pointed out that “Chinese authorities became increasingly worried about strong credit growth and introduced a number of restrictive financial measures, including tighter oversight of lending in the shadow banking system.” They managed to throttle current credit growth down to around 17%.     

The ""PAIN"" in China has ONLY Just Begun!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Homeowners abandon properties as prices plunge in Wenzhou

The real estate market has been plummeting in Wenzhou in eastern China's Zhejiang province, leading to a growing number of non-performing loans and the rising abandonment of properties by homeowners.

As of July 2013, the number of bad loans recorded at 412.77 million yuan (US$66.95 million) and the number of abandoned properties reached 595 as homeowners found themselves unable to pay off their debt.

Shanghai's National Business Daily reported that 70% of small and medium businesses have interests in the real estate sector. After the market starts experiencing a downturn, the market value of their collateral drops as well. As a result, banks downsize their lending for such companies. Many local companies are thus unable to get access to funds, which has become a thorny issue for the local authorities.

Wolf Richter 
Hamas arsenal suggests 'apocalyptic' scenario: Israeli official

West 'cannot tolerate' advanced capabilities discovered in Gaza, Israeli official says
By Terry Milewski, CBC News

An Israeli artillery crew near the Israel and Gaza border prepares to fire toward Gaza. A senior Israeli defence official told reporters in Ottawa on Wednesday the Hamas tunnel network was surprising in its extent and sophistication.

The Western world "cannot tolerate" the strategic threat posed by a Hamas with newly uncovered "state-like" capabilities in rocketry and tunnelling, a senior Israeli defence official told reporters in Ottawa today.

The senior official, who cannot be identified under the ground rules of the briefing, said the Israeli military had considerable prior knowledge of Hamas weaponry and tunnels, but was still "surprised" by the extent of both when the current ground operation began last Thursday.

Destruction of Israel only way forward: Iran
BY IANS | July 24, 2014

Tehran, July 24 (IANS) “Annihilation of the Zionist regime of Israel” is the only way forward to heal the agonies of the Palestinians, Iran’s Supreme Leader Ayatollah Ali Khamenei said Wednesday.

“Of course, the destruction of Israel as the only real way froward does not mean the annihilation of the Jewish people in the region,” Khamenei was quoted as saying by official IRNA news agency, according to Xinhua.

Iran’s proposal is that “the people who are living in the region and belong to the region would choose their own political system in a referendum”, he said, adding that “this, in due course, will result in the destruction of the fabricated regime” of Israel.

The Iranian leader suggested that the “armed resistance” is the only possible response to the atrocities of Israel against Palestinians.

“We believe that the (Palestinians) in the West Bank should also be armed like in Gaza… So that the agonies of the Palestinian people could be lessened as they get powerful and their enemy becomes weaker,” he said. 

Why Doesn’t Obama Speak Out Against Christian Persecution?
It makes you wonder...
By L. Todd Wood

In March of this year, President Obama traveled to Saudi Arabia to meet with Saudi King Abdullah.  The purpose of the visit was to reassure the kingdom that the United States still values them as an ally, as American policy had shifted noticeably against Saudi Arabia–and the king was unhappy.  From American refusal to arm the rebels fighting the Assad regime to the apparent appeasement of Iran, Saudi Arabia’s views were going unheard.  The kingdom showed its displeasure by refusing a seat on the U.N. Security Council, which hurt American ability to impact decision-making in that body.

Krauthammer: Obama Has Defended Muslims, Where Is He On Christian Persecution?

CHARLES KRAUTHAMMER: Where is the president on this? This is persecution of Christians who predate the Muslims by 600 years in the Middle East. These people in Mosul were there before there was Islam in the same way that the Jews of Baghdad -- who were about a third of the population in the late 40s -- who were expelled were there a thousand years before that. This is the exclusivity of this kind of radicalism.

Where is the president? He talked about how disrespectful we were to Muslims in many of his speeches. Where is he standing up to the Christian minorities in Egypt, in Lebanon, in Palestine, among other places in the West Bank, and now in Iraq as a way to say we care about this and America stands above it instead of a dumb statement coming out of the State Department? 

Krauthammer: U.N. So Committed To Hamas That It Doesn't Care About Appearances Anymore

CHARLES KRAUTHAMMER: This statement tells you all you need to know about how corrupt and corrupted the U.N. is in the conflict between Israel and the Arabs. Number one, the missiles haven't gone missing, we know what happened. The U.N. workers returned them to the authorities, quote, unquote. Which means Hamas, and they will be used against innocent Jews.

Second, the expression of outrage, that he is shocked, shocked to discover that there are missiles in the U.N. school is preposterous. How do you smuggle 20 missiles into a classroom? Can you imagine the principle in the U.S. saying, 'Well, I really am not sure how they got there.' What did Hamas do? Put them in a golf bag? Walk them in and say he is preparing for the Gaza open?

The U.N. workers have collaborated with Hamas for years and years. They know that there are missiles in the schools, in the hospitals, in the mosques, and they know what's going to happen. Kids will be killed and that's going to be on television. And the secretary general complains that this was smuggling into the schools. The problem isn't smuggling. The problem is that the use of human shields is a violation of the fundamental law of war. That's what's happening and the U.N. is aiding and abetting. 

The THIRD Crusade.......................Coming at YOU America!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

""*****Ezekiel 38*****""
China Conducts Third Anti-Missile Test

China’s military conducted a successful land-based anti-missile test this week, following similar ones in 2010 and 2013.
By Zachary Keck

China’s military has conducted its third anti-missile test, according to state-run media.

On Wednesday the People’s Liberation Army conducted a “land-based anti-missile technology experiment,” Xinhua reported, citing China’s Ministry of Defense. The report said that the Defense Ministry also said that the test “achieved the desired objectives,” without providing any additional details.

This is the third test of its kind that China has announced. In January 2013, state media cited the PLA as saying that it had successfully conducted a “land-based mid-course missile interception test.” The reports at the time said that the test had involved highly sensitive technologies used for “detecting, tracking and destroying a ballistic missile flying in the outer space.”

Chinese state media reported the same thing in January 2010 following China’s first test. At the time, a Foreign Ministry spokesperson had assured the world that “The test was defensive in nature and targeted at no country.” Xinhua also clarified that the test “would neither produce space debris in orbit nor pose a threat to the safety of orbiting spacecraft.”

According to Global Security, the U.S. intelligence community assessed that the first anti-ballistic missile test in 2010 had used a SC-19 missile launched from the Korla Missile Test Complex in western China to successfully intercept a CSS-X-11 medium-range ballistic missile that was launched from the Shuangchengzi Space and Missile Center approximately 1,100 kilometers away from Korla.

Lies, Damned Lies and Maps

Cartography helps set the parameters within which debates over policy and strategy unfold.
By James R. Holmes

We mathematicians often stand accused of skullduggery, but we’ve got nothing on cartographers. Mark Twain jested that there were lies, damned lies, and statistics. An old book from the 1950s instructs readers How to Lie with Statistics. So fraught is the situation that University of Wisconsin math professor Jordan Ellenberg wrote an entire book — and a laugh-out-loud funny one at that — to debunk faulty mathematical thinking and the misadventures to which it gives rise. Such are the consequences of our dark art.

But if numbers inform — and sometimes misinform — think about maps. A map or nautical chart is a picture. It’s a visual medium that conveys lots of seemingly factual information at a glance. One vignette. Europeans, and Europeanists, fret constantly that the United States must turn its back on Europe to pivot to Asia. You have to blame the Mercator map of the world for such claims. If Washington, D.C. is America’s geopolitical pivot point, and if we assume U.S. leaders can only gaze in one direction, then pivoting to the Far East does indeed mean doing an about-face.

When I discuss the rebalance with various audiences, consequently, I’ve taken to showing the pivot on a Mercator map … and then showing it on a polar azimuthal equidistant projection a spaceman’s-eye view down on the North Pole. When you do so, behold! Forces based on the U.S. west coast and Hawaii surge across the Pacific Ocean, sweeping around one side of the Eurasian periphery. But forces based on the east coast reach Asia through the Mediterranean and Red seas, their closest route to the western Indian Ocean and Persian Gulf. That pathway takes them around Eurasia’s other side. 

Japan speeding up its purchase of 2 new fleet BMD ships; Background improved.

July 22/14: The Yomiuri Shimbun reports that Japan is speeding up a planned purchase of 2 new ballistic missile defense destroyers (q.v. Nov 6/13) as something of an Urgent Operational Requirement, with the first order to be placed in FY 2015, and the 2nd in FY 2016. Each ship would cost about YEN 150 billion (about $1.478 billion), which is a better price than the Americans pay for their smaller Arleigh Burke Flight IIA destroyers.

These 2 destroyer orders would definitely fall within the early portion of the 2013 – 2023 National Defense Program Guidelines, which first mentioned the planned vessels. Media estimates indicate that these 2 ships would be fielded in 2020 – 2021. In the interim, US Defense Secretary Chuck Hagel announced that the USA would raise the number of AEGIS BMD destroyers homeported at Yokosuka from 5 – 7 ships by 2017.

Japan is also growing its BMD fleet to 6 ships, by adding the Atago Class. Based on a conservative 1 deployed, 1 portside/ training, 1 maintenance ratio, 6 ships ensures 2 deployed vessels at all times. In reality, the amount of time in maintenance is smaller, but raising the total to 8 ships provides more surge capacity coverage, acts as insurance against accidents that may take a ship or 2 out of service, and allows the JMSDF to use its top-end ships for more territorial patrols. America’s long-running failure to prevent North Korea from going nuclear has become a grave concern, but not the only one. China is stepping up its activities in the Yellow Sea and beyond, especially around disputed territories. Sources: Yomiuri Shimbun’s The Japan News, “2 more Aegis destroyers set for FY20″ | The Diplomat, “Japan’s Building 2 Aegis Destroyers”.

Report: Japan Plans to Buy Northrop-Made Global Hawk Drones

Japan plans to invest approximately 372 million dollars over the next decade to buy new unmanned aerial vehicles as part of a military fleet expansion, Defense One reported Monday.

Daniel Medina writes that an IHS Jane’s senior analyst has indicated that the Japanese government is interested in acquiring Northrop Grumman-made (NYSE: NOC) Global Hawk UAVs as well as missile-tracking drones.

“They (Japan) are progressing their indigenous design and development capability at a rapid pace and could actually meet their objectives even before fiscal year 2020,” the analyst said, according to the publication.

Defense One reports that the UAV program is intended to help Japanese defense forces protect the nation’s maritime and airspace zones amid its territorial dispute with China.

The proposed $372 million drone investment marks a 300 percent increase from current unmanned aircraft spending levels, according to Medina.

China think tank accuses Japan of preparing for war
Kyodo News International

Recent increases in the frequency of Japanese military exercises suggest that the country is preparing for war, a think tank with close ties to China's military said in a report released Wednesday.

"Island landing" and other readiness drills conducted by Japan's Self-Defense Forces "are not only provocative and confrontational, but also meant for war preparedness," the China Strategic Culture Promotion Association said in its third annual report on Tokyo's military capabilities.

The report, which reviews Japan's military strategy in 2013, added that the increase in exercises with the United States and other countries is especially notable in the context of ongoing disputes between Japan and China over the Senkaku Islands, known as Diaoyu in China. 

China Japan Military
Heads UP to You Socialists at the ECB and BoJ.............................Your Economies ARE Heading for the MOTHER of ALL ""RECESSIONS""!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The Rot Within, Part II: Inflation Is Not "Growth"
By Charles Smith
July 23, 2014

Just as the Federal Reserve cannot directly force you to stick the needle of monetary heroin (debt) into your arm, it also can't force employers to pay employees more.

The official policy of the Central Bank (Federal Reserve)/government is: inflation is necessary for "growth," i.e. economic expansion. The unstated reason for this official support of inflation is that it's easier for borrowers to service their debts as their income inflates.

To take an extreme example: let's say a homeowner has a mortgage of $100,000, an annual wage of $40,000 and annual mortgage payments of $10,000. At 100% annual inflation in both prices and wages, the home mortgage remains fixed at $100,000, the payment remains fixed at $10,000 but his earnings double to $80,000.

Where the mortgage payment initially took 25% of his earnings, now it only takes 12.5%. Yippee Skippy, the homeowner has an "extra" 12.5% of his earnings to support more consumption and debt: thanks to inflation, the homeowner can now buy a car on credit and use the "extra" 12.5% of earnings to pay the auto loan.

Central banks around the world seek inflation for another reason: the Keynesian Cargo Cult that dominates all central banks and governments believes with quasi-religious certainty that people respond to inflation by buying more stuff now rather than later: since prices will rise in the future, it makes sense to buy stuff now at "lower prices compared to next year's prices."

This is called bringing demand forward, as the demand to buy stuff is shifted from the future to the present.


EUROPE Deflation

Kyle Bass Japan..............................Abenomics "IS" going to FAIL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Charles Smith 
Europe braced for any gas crisis as Russia sanctions escalate

LNG terminals in Britain and the Continent currently operating at just 20pc of full capacity 
By Ambrose Evans-Pritchard

Europe has enough spare capacity in liquefied natural gas (LNG) to meet a large part of the region’s needs if Russia retaliates against the latest EU sanctions by restricting gas supplies.

The showdown with Russian president Vladimir Putin comes at moment of surging global supplies of LNG, which can be diverted to European markets and reduce the Kremlin’s political leverage. The price of LNG in Asia has crashed from $20 to $11 per million British thermal unit (BTU) since February.

The pan-EU group Gas Infrastructure Europe said the network of LNG terminals in Britain and the Continent is currently operating at just 20pc of its full capacity. It could in theory boost flows by 160bn cubic metres (BCM), if there is available gas.

This is more than Russia’s entire shipments, which reached 155 BCM last year. The European network of pipelines does not cover every region and would leave pockets in eastern Europe without supply.

“We have a lot of free capacity in LNG in Europe. It would be extremely difficult to replace Russian gas in a just a few months but it is possible to raise supply,” said one official.

RUSSIA Natural Gas 

EUROPE..........................Totally SCREWED for the REST of this DECADE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Expert sees another recession on horizon

He says sluggish growth in Europe, Brazil, China and Russia could hamper U.S.
The Associated Press

NEW YORK — Just as the U.S. economy is strengthening, other countries are threatening to drag it down.

Employers in the U.S. are creating jobs at the fastest pace since the late 1990s and the economy finally looks ready to expand at a healthy rate. But sluggish growth in France, Italy, Russia, Brazil and China suggests that the old truism, "When the U.S. sneezes, the rest of the world catches a cold," may need to be flipped.

Maybe the rest of the world will sneeze this time, and the U.S. will get sick.

That's the view of David A. Levy, who oversees the Levy Forecast, a newsletter analyzing the economy that his family started in 1949 and one with an enviable record. Nearly a decade ago, the now 59-year-old economist warned that U.S. housing was a bubble set to burst, and that the damage would push the country into a recession so severe the Federal Reserve would have no choice but to slash short-term borrowing rates to their lowest levels ever to stimulate the economy. That's exactly what happened. Now, Levy says the United States is likely to fall into a recession next year triggered by downturns in other countries, the first time in modern history.

"The recession for the rest of the world ... will be worse than the last one," says Levy, whose grandfather called the 1929 stock crash and whose father won praise over decades for anticipating turns in the business cycle, often against conventional wisdom.

Levy's forecast for a global recession is an extreme one, but worth considering given so much is riding on the dominant view that economies are healing. Investors have pushed U.S. stocks to record highs, and Fed estimates have the U.S. growing at an annual pace of at least 3 percent for the rest of the year and all of 2015. Investors also have poured hundreds of millions of dollars into emerging market stock funds recently on hopes economic growth in those countries will pick up, not stall.

Europe’s Surplus of Stagnation
By Robert Skidelsky

Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics, is a member of the British House of Lords. The author of a three-volume biography of John Maynard Keynes

LONDON – While the rest of the world recovers from the Great Recession of 2008-2009, Europe is stagnating. Eurozone growth is expected to be 1.7% next year. What can be done about it?

One solution is a weaker euro. Earlier this month, the chief executive of Airbus called for drastic action to reduce the value of the euro against the dollar by about 10%, from a “crazy” $1.35 to between $1.20 and $1.25. The European Central Bank cut its deposit rates from 0 to -0.1%, effectively charging banks to keep money at the Central Bank. But these measures had little effect on foreign-exchange markets.

That is mainly because nothing is being done to boost aggregate demand. The United Kingdom, the United States, and Japan all increased their money supply to revive their economies, with currency devaluation becoming an essential part of the recovery mechanism. ECB President Mario Draghi often hints at quantitative easing – last month, he repeated that, “if required, we will act swiftly with further monetary policy easing” – but his perpetual lack of commitment resembles that of Mark Carney, the governor of the Bank of England, whom one former UK government minister recently compared to an “unreliable boyfriend.”

But the ECB’s inaction is not wholly responsible for the appreciation of the euro’s exchange rate. The pattern of current-account imbalances across the eurozone also plays a large role.

Germany’s current-account surplus – the largest in the eurozone – is not a new phenomenon. It has existed since the 1980s, falling only during reunification, when intensive construction investment in the former East Germany more than absorbed the country’s savings. The external surplus has grown especially rapidly since the early 2000s. Today, it remains close to its pre-crisis 2007 level, at 7.4% of GDP. 

Stalled recovery leaves Europe defenceless against economic shock from Russia

Stagnation is automatically causing debt ratios to spiral upwards yet again across a large part of the currency bloc
By Ambrose Evans-Pritchard

Europe's economic recovery has stalled. The EMU policy elites took a fateful gamble that global growth alone would lift the eurozone off the reefs, without the need for serious monetary stimulus or a reflation package to ensure take-off velocity.

Their strategy has failed. The Bundesbank says German growth may have slumped to zero in the second quarter. French industrial output has fallen for three months in a row. French business surveys point to an outright contraction of GDP, with a high risk of a triple-dip recession.

Stagnation is automatically causing debt ratios to spiral upwards yet again across a large part of the currency bloc. The situation is doubly delicate since the European Central Bank is no longer able to serve as a lender-of last resort for Italy, Portugal and Spain.

Germany's top court has ruled that the ECB's back-stop plan (OMT) "manifestly violates" the EU treaties, and is probably Ultra Vires. The political reality is that the OMT cannot be deployed, whatever the European Court says when it issues its own judgment long hence.

Any external economic shock at this stage risks exposing the fundamental incoherence of the EMU system, and therefore shattering the fragile truce in the markets. It is this fear - even more than worries about gas supply - that is contaminating the crisis strategy towards Russia.

Have central banks been breaking the law?

Quantitative easing has had a reverse Robin Hood-type effect by robbing from the poor and giving to the rich
By Jeremy Warner

The best way to destroy the capitalist system, the Russian revolutionary leader Vladimir Lenin is reputed to have said, is to debauch the currency. The world’s major central banks have certainly been having a fair old go at it. In the six years since the financial crisis first broke, they’ve been printing money like there is no tomorrow.

Fortunately, they have not yet managed to bring down the free market system. On the other hand, they have succeeded in putting a rocket under asset prices and, in so doing, they have greatly exaggerated the wealth divide.

In a number of cases, including the US and the UK, they have also significantly assisted governments in financing burgeoning fiscal deficits. To the extent that quantitative easing (QE) has had any effect at all, it is asset prices and governments that have been the prime beneficiaries.

This might seem something of an old issue now; the Bank of England stopped buying assets more than two years ago, while the US Federal Reserve is “tapering” fast. For the US and Britain, the age of “unconventional monetary policy” seems to be largely over.

Elsewhere, however, QE remains very much a work in progress. In Japan it’s continuing at heroic pace, while on the Continent the European Central Bank is being urged by the International Monetary Fund to stop dilly-dallying in the face of deflationary pressures and get on with it. 

Uncle Bens' ""QE"" VooDoo IS going to FAIL everywhere it was TRIED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

First Comes the ""GROWTH Recession"" THEN the MOTHER of ALL ""GLOBAL Recessions""!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

EUROPE..........................Totally SCREWED for the REST of this DECADE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Obama's America!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 
The ""PAIN"" in China has ONLY Just Begun!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

IMF Cuts US GDP From 2.0% To 1.7% As US Retail Sales Forecast Slashed From 4.1% To 3.6%: Winter Blamed

This is what happens when a priced to perfection global economy (and well beyond perfection based on the S&P 500) runs into the utterly and completely unpredictable and unforseeable "harsh winter weather."
First, the IMF just cut (again) its forecast for US GDP, this time from 2.0% to the consensus-estimate 1.7%. The IMF cited the 1Q contraction, which from a +3% original estimate ended up being that, just with a minus sign. It also says second-half growth to accelerate... because it must!
  • Some other brilliant points from the IMF:
  • IMF staff: U.S. to reach full employment “only by end-2017”
  • “The economy is expected to reach full employment only by end-2017 and inflationary pressures are expected to remain muted”
  • “If true, policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets”
  • Says job market “reasonably healthy,” wages should rise slowly 

Homeowners abandon properties as prices plunge in Wenzhou

The real estate market has been plummeting in Wenzhou in eastern China's Zhejiang province, leading to a growing number of non-performing loans and the rising abandonment of properties by homeowners.

As of July 2013, the number of bad loans recorded at 412.77 million yuan (US$66.95 million) and the number of abandoned properties reached 595 as homeowners found themselves unable to pay off their debt.

Shanghai's National Business Daily reported that 70% of small and medium businesses have interests in the real estate sector. After the market starts experiencing a downturn, the market value of their collateral drops as well. As a result, banks downsize their lending for such companies. Many local companies are thus unable to get access to funds, which has become a thorny issue for the local authorities.

Zhang Ming, a staffer at the government's finance office, said he has been conducting field investigations more frequently to understand the situations of these companies and try to devise a plan to resolve their risks.

Property prices in Wenzhou have been falling for three straight years, dropping by more than 30%. 

First Comes the ""Growth Recession"" THEN the MOTHER of ALL ""Global Recessions""!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Fidelity’s Average IRA Contributions Climb to over $4,000— an All-Time High

Use of mobile check deposit app surges, making it easier for customers to make contributions into IRA accounts

BOSTON--(BUSINESS WIRE)--Fidelity Investments® today released its second annual analysis of over seven million Individual Retirement Accounts (IRAs), which revealed that average contributions for tax year 2013 reached $4,1501, a 5.7 percent increase from tax year 2012 and an all-time high. Average balances were $89,100, a nearly 10 percent year-over-year increase.

“We know it’s human nature for many individuals to procrastinate but Fidelity Mobile Apps make it easy for customers to stay connected with their accounts and make timely retirement contributions while they are on the go.”

“Saving more, paying off debt and spending less were the top three New Year financial resolutions cited in a recent Fidelity study2 and our IRA analysis indicates that Americans are taking those financial resolutions seriously,” said Ken Hevert, vice president, Fidelity Investments. “The fact that IRA contributions are up across all age groups is a positive indication that many people are indeed committed to saving for retirement by putting at least a portion of what they earn into tax-advantaged vehicles such as an IRA.”

The findings from Fidelity, the No. 1 provider of IRAs to investors3, shows investors 50 years of age and over continue to save the most in Traditional and Roth IRAs. Younger investors, those in their 20s, 30s and 40s, are adopting strong savings behaviors and have made strong increases with overall average contributions—3.9 percent, 6.7 percent and 6.2 percent, respectively from 2012 tax year to 2013 tax year.

Additionally, average contributions to Roth IRAs continue to outpace average Traditional IRA contributions on both ends of the age spectrum. Younger investors, who are more likely to be eligible to contribute directly to a Roth IRA, can take advantage of tax-free growth potential and withdrawals, while older investors utilize the savings vehicle when they are no longer able to contribute to a Traditional IRA as a result of reaching age 70 ½.

Full contribution rates by age are as follows:

China Averts Second Corporate Default as Huatong Pays Bonds

China avoided a second default in its onshore corporate bond market, easing concern that financial-market instability could spread as debt rises and growth slows in the world’s second-largest economy.

Huatong Road & Bridge Group Co. paid all principal and interest on 400 million yuan ($65 million) of notes today, four people familiar with the matter said, asking not to be identified because they weren’t authorized to speak publicly. The builder based in the northern province of Shanxi said last week it might fail to make payment.

Speculation is mounting that nonpayments will increase in China’s $4.2 trillion bond market as policy makers try to balance the risk of letting weaker companies fail and ensuring market stability. Shanghai Chaori Solar Energy Science & Technology Co. was the first to default in March when it didn’t meet part of an interest payment on 1 billion yuan of debt. Huatong was making efforts to raise the funds, with help from local governments and bond underwriters, company official Geng Naizhuang said by phone July 18.

“It’s the right move to help protect stability in the market,” said Qiu Xinhong, a fund manager in Guangzhou at Golden Eagle Asset Management Co., which oversees about 11.3 billion yuan. “If Huatong had defaulted, local governments and the local companies in the city or the province would all have problems raising money.”

Chinese Banks Seen Discounting Mortgage Rates, Survey Shows
By Bloomberg News

Chinese banks will probably offer discounted mortgage rates to their clients in the second half of 2014 as demand in the country’s housing market weakens, according to a Bloomberg News survey.

Banks will resume preferential mortgage rates, according to 74 percent of analysts and economists in a survey conducted from July 14 to July 17. Fifty-six percent forecast banks will lower minimum down payments, while 59 percent said they expected the central bank to ease its mortgage restrictions. A total of 29 economists and analysts responded to the survey.

New home sales slumped 9.2 percent in the first half of the year from a year earlier amid tighter credit, forcing developers including China Vanke Co. to cut prices since March. The central bank in May called on the nation’s biggest lenders to accelerate the granting of mortgages, a sign that developers’ price cuts and incentives alone won’t boost a slumping market and economy.

“If mortgage restrictions really loosen, it removes the biggest factor restricting home sales,” said Dai Fang, a Shanghai-based analyst at Zheshang Securities Co. “That will provide very good support to property stocks.”

Chinese property bailouts proliferate
By Houses and Holes in China Economy

Chinese authorities attempts to balance their reform and growth agendas have resulted in another bailout of a looming bond default. From Reuters:

    A troubled Chinese construction company avoided a landmark bond default at the last minute on Wednesday, raising enough funds to pay off both principal and interest on a 400 million yuan ($64.51 million) bond, people directly involved in the matter told Reuters.

    The people said there was aggressive fundraising by Huatong Road & Bridge Group Co Ltd, as well as collection of its accounts payable by a local government in Shanxi province, where the firm is based.

    The moves let Huatong steer away from what would have been the first public default in China’s massive interbank bond market – where 94 percent of all Chinese bonds are issued.

    …Analysts said many receivables involved other local government bodies that had hired Huatong to build real estate projects, then delayed payment due to their own financial difficulties.

    The analysts also said avoidance of a default is unlikely to reassure China’s fixed income markets, which have seen steadily rising rates for short-term debt as demands from cash-strapped companies for money continue.

    “No market can sustain a status quo of no-defaults,” a trader at an Asian bank in Shanghai said. “Chinese authorities will find one day that they cannot support all money-losing companies.” 

China’s enormous bad debts may mean good times for bankruptcy experts
By Heather Timmons

Opinions remain divided about the health of China’s economy and the country’s future growth prospects, but one thing is for sure—the country’s debt load is massive—and it’s growing fast.

Overall debt now totals 250% of the country’s GDP (paywall), according to a Standard Chartered report released this week, up from 234% just six months ago. That puts China’s debt-to-GDP ratio at a level only seen in developed economies like the US and Japan. “China has become indebted before it has become rich,” Chen Long, an economist at research firm Gavekal Dragonomics, explained to the Financial Times. Chinese companies have $14.2 trillion in outstanding loans, S&P said recently, the most of any country in the world.

The growth in borrowing is being accompanied by a rising tide of delinquent and non-performing loans, according to bankers and analysts, which threatens to create a spiraling problem for their creditors, investors and customers, not to mention the economy as a whole.

Chinese Economy "IS" the Biggest FRAUD on Planet Earth!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

China HARD Landing.........................Has Begun!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Money fund rule changes offer new reality to U.S. retail investors
By Tim McLaughlin and Ross Kerber

BOSTON (Reuters) - New rules announced on Wednesday will likely drive safety-oriented retail investors away from some money market funds because they highlight risks and make it harder to pull cash out when market turmoil strikes.

The U.S. Securities and Exchange Commission's reform will force institutional "prime" money market funds to float their share price, a major change from the current convention that allows them to maintain a stable $1 per share net asset value. The new rules also would allow money funds to impose fees and restrictions on withdrawals during times of extreme market stress.

"Why would anyone stay in these money funds once they’re floating, rather than just go to a government or treasury fund that’s not floating at all?” said Diahann Lassus, president of Lassus Wherley & Associates, a New Jersey financial adviser.

Institutional prime money funds attract mostly professional investors and are considered more risky because of their exposure to short-term corporate debt. Investment advisers say money could flow away from these funds and into funds composed of safer government securities.

Bank-insured sweep accounts will be a clear alternative for the safety-first crowd, while short-duration bond funds appeal to investors hunting for higher yields, financial advisers said.

Money funds already have lost some luster during an extended period of near-zero interest rates. Investors typically receive yields of 0.01 percent on their money, a losing proposition if you factor in inflation. 

Spain introduces a 0.03% tax on all bank account deposits; is the U.S. next?
By Andrew Moran

Last year, Cyprus made headlines all over the world for the wrong reasons. Due to a financial crisis, the government instituted a tax upwards of 50 percent on bank deposits exceeding 100,000 euros – initially it was all deposits but the citizens were in upheaval. Now Spain is following the same financial path.

Earlier this month, the Spanish government introduced a 0.03 percent tax on all bank account deposits, according to a report from Reuters. The initiative, which is estimated to generate approximately half a billion dollars in revenues, is meant to complement tax regimes and to create revenues for cash-strapped communities. 

Portugal banks are the least of euro zone’s problems
By Nicholas Spiro, managing director of Spiro Sovereign Strategy

Financial markets' reaction to the recent troubles of Portugal's Banco EspĂ­rito Santo (BES) is revealing.

First, the good news.

After a fairly dramatic sell-off July 10, which revived fears about the vulnerability of banks and governments in the euro zone, markets settled down very quickly.

Although BES's woes are worrying and could yet lead to a "bail-in" – where losses will be imposed on some of the bank's private creditors -- it is an isolated affair and is perceived as such by markets.

Yields on Spanish and Italian government bonds - the most reliable gauge of sentiment towards the euro zone - have barely budged. Even Portugal enjoyed strong demand for a sale of six- and 12-month bills July 16, with a lower yield on the six-month note than at a previous sale in March.

Make no mistake about it, the resilience of the debt markets of the euro zone "periphery" – in particular Spain and Italy -- shows no signs of waning.

Now, the bad news.

That the problems of a relatively small bank sparked a major sell-off in global financial markets suggests that, beneath the favorable sentiment towards the euro zone, investors still harbor serious concerns about Europe's ill-managed single currency area - and rightly so.

Cypriot firm launches legal action against EU over 'bail-in'
By Joanne Harris

Cypriot firm Dr K Chrysotomides & Co has filed a lawsuit against the EU on behalf of 51 claimants seeking compensation for losses suffered when Cyprus agreed to a ‘bail-in’ on two Cypriot banks.

The case, filed before the General Court of the EU against the Eurogroup, the European Central Bank, the European Commission and the EU Council, challenges the Eurogroup’s March 2013 decision to impose a ‘bail-in’ on the Bank of Cyprus and the former Laiki Bank, which saw thousands of bank customers lose savings.

The haircut was imposed by the EU, which originally proposed that all depositors in Cypriot banks would lose 10 per cent of their savings in return for a bailout of the country’s economy. The Cypriot government eventually negotiated a compromise, which meant those with savings of less than €100,000 (£85,000) had their deposits transferred to the Bank of Cyprus as the country’s second-largest bank, Laiki, was wound down. Those with savings of more than €100,000 lost a substantial chunk of their money.

Cases have already been filed in Cyprus challenging the legality of the move, but the Chrysotomides case is the first to seek redress from the EU. 

Customers panic as FBME Cyprus under central bank resolution

The Financial Mirror received several calls from concerned customers who were not reassured by the central bank’s statements, as some sought to withdraw their deposits, for fear of a repetition of last year’s “bail in” imposed on savers by the Eurogroup to rescue Bank of Cyprus.

“The purpose of the decree is the sale of the operations of the [FBME] branch with the aim of the protection of depositors,” said Monday’s decree, published in the official Gazette of the Republic and signed by the Governor Chrystalla Georghadji, CBC Council member Stelios Koiliaris and Senior Manager Yiorgos Syrichas.

The decision shows the commitment of the Cypriot independent institutions to safeguard financial stability, Government Spokesman Nicos Christodoulides stressed on Tuesday.
Last week, a US Treasury report implicated the bank in money laundering.
“FBME was involved in at least 4,500 suspicious wire transfers through U.S. correspondent accounts that totalled at least $875 mln between November 2006 and March 2013,” the report said.

The lender sought to clarify its position with an announcement saying that “as a result of the financial uncertainty in Cyprus in the past two years, FBME Bank commissioned a detailed assessment by the German office of a leading international accountancy firm into its operations and practices, which found that the Bank’s services are indeed in compliance with applicable anti-money laundering rules of the Central Bank of Cyprus and the European Union”.

Canadian banking outlook downgraded over ‘bail-in’ move, adding to recent financial stability concerns
By Daniel Seleanu

TORONTO, July 17, 2014 (Thomson Reuters Accelus) -  In yet another worrying sign for Canada’s financial sector, Moody’s Investors Service has lowered its outlook for the Canadian banking system from “stable” to “negative” over uncertainty about government willingness to bail out banks during a crisis. It follows a pair of recent warnings issued by the Bank of Canada (BOC) and the Bank for International Settlements (BIS), both of which highlighted the growing risk of stress posed by runaway consumer debt and property prices.

Moody’s negative outlook reflected the rating agency’s pessimism over Canada’s plan to implement a “bail-in” regime that would avoid taxpayer-funded bank bailouts by shifting some of the burden to bondholders. It would allow banks to convert some of their debt into to equity during a crisis.

“The accelerating global trend of governments to share the burden of bank resolutions with senior bondholders could reduce the predictability of government support in bank failure scenarios,” Moody’s Senior Vice President David Beattie said in a statement. He added that the ratings for most Canadian banks were buttressed by the agency’s “very high expectation of support” from the government. 

'Bail-in' regime for banks should apply industrywide: ANZ CEO

(Reuters) - Banks around the world should be obliged to follow a "bail-in" regime if it were to be implemented, and not just those "too big to fail", Michael Smith, chief executive of Australia and New Zealand Banking Group, said on Wednesday.

On Tuesday, a government-backed interim review said Australia's main lenders were viewed as too big to fail and it was considering policy options to reduce that perception, including ringfencing critical banking activities, bail-in and boosting capital requirements.

"If you have a bail-in of the globally systematically financial institutions you then have to have a bail-in throughout the industry," Smith told reporters ahead of a meeting of the Business 20 group in Sydney. 

This Time Is Not Different: Why The Market Is Heading For A Fall
By David Stockman

The 2008 Wall Street meltdown is long forgotten, having been washed away by a tsunami of central bank liquidity. Indeed, the S&P closed yesterday at 1,983—or up by nearly 200% from its March 2009 low. Yet four cardinal measures of Main Street economic health convey nothing like a 2X pick-up from the post-crisis bottom.

To wit, in June the count of breadwinner jobs was 68.5 million or 5% below were it stood as the crisis got underway. Likewise, business investment in real plant and equipment is still 5% below its late 2007 peak. So too with the real median family income at about $53k—its still down by 6%. And unlike past cycles where safety net programs like food stamps shed recipients as the recovery gained momentum, there are still nearly 47 million Americans in the program compared to 30 million in March 2009.


This juxtaposition has been explained away by Wall Street stock touts under the heading that “this time is different”. Markets have allegedly sprung loose from their moorings in the real economy owing to record corporate profits and an upward re-rating of PE multiples reflecting lower than historical interest rates. And, indeed, the raw facts can be marshaled to this end.

As shown in the stunning chart below, profits have doubled as a share of corporate net value added since the turn of the century. Likewise, when measured against GDP, profits are at 60-year highs. 

Obama's America!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Doing what "IS" Needed to prepare for the ""***MOTHER***"" of ALL ""Global Recessions""!!!!!!!!!!!!!!!!!!!!! The Coming CORRECTION "IS" going to be BRUTAL and only then Will Americans find out that THEIR Money Really ain't THEIRS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

The TIME "IS" Coming that a Safety Deposit Box containing Gold and Silver Coins makes for a Better Idea than holding Dollars, EUROs, Pound Sterling and Especially YEN. 

The Great Reset "IS" Coming and with it the Greatest ""Currency Crisis"" Planet Earth has Ever SEEN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

SEC's long path to money market fund reform ends in compromise
By Sarah N. Lynch

(Reuters) - U.S. regulators adopted moderate reforms for money market mutual funds on Wednesday, in what amounted to a compromise that aims to balance the need to reduce the risk of runs on the funds while still protecting the product's utility for investors.

The Securities and Exchange Commission's rule garnered mixed reviews from the industry and even the SEC's own commissioners, with two voting against it.

The main pillar of the rule requires "prime" money funds used by institutional investors to float their values, instead of letting them maintain a stable value at $1 per share. The goal is to prevent investors from getting spooked by the prospect of funds breaking the buck, or their net asset value falling below $1 per share.

In addition, fund boards will have discretion to lower "gates" on redemptions, or charge fees of up to 2 percent if market stress causes a fund's weekly liquid assets to fall below 30 percent.

SEC Reforms Money Market Funds, Unveils Floating NAV

The Securities and Exchange Commission voted Wednesday to impose new rules on money market funds aimed at cutting the risk of a mass exodus out of the funds during a financial panic.

One key new rule ends a longtime feature of funds — the fixed $1 share price. It would replace the fixed price with a floating net asset value.

But the new floating NAV rule impacts only money funds used by big investors. Retail funds used by individual investors are exempt.

The new rules apply to prime institutional money market funds. Those are typically used by corporations, pension funds, institutions such as colleges, and government entities, according to Michael Krasner, manager editor at

The rule does not apply to prime retail and government money market funds.

Any of the relatively few high-net-worth individual shareholders in prime institutional accounts will almost certainly switch to a retail money market fund during the rule's two-year transition period, says Peter Crane, president of Crane Data.

A floating NAV would reflect the per-share value of underlying assets. Regular stock and bond mutual funds are also priced with floating NAVs.

The SEC's goal is to reduce shareholders' reasons for making mass withdrawals by requiring money fund prices to more accurately reflect their actual values.

Compared with nonprime funds, prime funds tend to pay higher yields, and they invest in riskier nongovernmental securities. 

The "Gates" Are Closing: SEC Votes Through Money Market Reform


It was nearly five years ago when Zero Hedge first wrote: "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" in which we predicted as part of the ongoing herding of investors away from every other asset class and into stocks, regulation will be implemented to enforce that "money market fund managers will have the option to 'suspend redemptions to allow for the orderly liquidation of fund assets" or in other words implement redemption "gates." The logic: spook participants in the $2.6 trillion money market industry with the prospect of being gated (i.e., having no access to ones funds) and force them to reallocate funds elsewhere.  

Moments ago the gates arrived, when following a close 3-2 vote (with republican commissioner Piwowar and democrat Stein dissenting), the SEC adopted new rules designed to curb the risk of investor runs on money market funds, capping the end of a years-long heated debate between regulators and the industry dating to the financial crisis according to Reuters.

Among the changes, funds will have to switch to a floating share price instead of the current $1/share (hence the term breaking the buck). But the key part: "The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption "gates" and fees in times of market stress."

And therein lies the rub, because the very presence of the "gate" effect will be enough to send money market investors rushing out (as they are all sophisticated enough to know that this fake, rigged market is a house of cards just waiting to come down) and into other asset classes.

Of course, it is the desire of the SEC, the Fed and the US Treasury that the one asset class picked as an alternative to money markets is equities: considering that the entire rally since 2009 has been on the back of the Fed and the primary dealers, with virtually none retail participation, the SEC decided it was about time to herd the "retail investor" out of the ZIRP "danger" of money markets and into the "safety" of an all time higher stock market where even Janet Yellen admits there is at least a biotech and a social media stock bubble.

Below are some of the concerns voice by one of the objectors, Kara Stein, via Bloomberg which incidentally are all spot on:

Redemption gates are the “wrong tool to address risk,” said SEC Commissioner Kara Stein during open meeting.

Fear incentives will result in “greater chance of fire sales in times of stress and spread panic to other parts of the financial system while denying investors and issuers access to capital”

Money Markets


Kyle Bass Europe AQR Banks 

Tuesday, July 22, 2014

With 1 Week Left Until Argentina's 'D'efault-Day, Judge Blasts "Judgments Are Judgments"

Day after day, headlines from Argentina implore Judge Griesa to do the "fair, responsible" thing and lift his judgment that holdouts get paid before current bondholders receive their payments... and day after day Argentina's demands are met with silence or denials. Today, though, with 1 week left until Argentina must put up or shut up, Judge Griesa has come out swinging...
While CDS spreads have surged once again, bonds trade with default probabilities around only 50% which, according to Jefferies "are expensive on underestimating the risk of default." 

Argentina.......................DEFAULT Dead Ahead!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 
ROTFLMFAO in TEARS at Obama and the Fricking ""BRAIN DEAD"" ***LIBERALS*** of America WHO Thought YOU were going to GET Subsidized HEALTH Care from the American Taxpayer!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Obamacare "IS" the BIGGEST Pile of ""LIBERAL"" BULLSHIT Ever to become LAW in the History of the United States!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Those of YOU Who HAVE ""Obama Insurance,"" Break OUT the KY and BEND Over because YOUR about to get a ROYAL Screwing with the Largest Premium SPIKE for Health Insurance in HISTORY!!!!!!!!!!!!!!!!!!!!!!! And YOU have ONLY ""*****LIBERALS*****"" to Fricking BLAME!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

America, I KEEP Telling YOU, Fricking ""BIG Government"" LIBERALS ain't YOUR Friend!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Federal appeals court deals blow to health law

WASHINGTON (AP) — A federal appeals court delivered a serious setback to President Barack Obama's health care law Tuesday, potentially derailing billions of dollars in subsidies for many low- and middle-income people who bought policies.

In a case before the U.S. Court of Appeals for the District of Columbia Circuit, a group of small business owners argued that the law authorizes subsidies only for people who buy insurance through markets established by the states — not by the federal government.

A divided court agreed, in a 2-1 decision that could mean premium increases for more than half the 8 million Americans who have purchased taxpayer-subsidized coverage under the law. The ruling affects consumers who bought coverage in the 36 states served by the federal insurance marketplace, or exchange.

The majority opinion concluded that the law, as written, "unambiguously" restricts subsides to consumers in exchanges established by a state. That would invalidate an Internal Revenue Service regulation that tried to sort out confusing wording in the law by concluding that Congress intended for consumers in all 50 states to have subsidized coverage.

The administration is expected to appeal the ruling. 

In Potentially "Lethal Blow" For Obamacare, US Appeals Court Finds Insurance Subsidies Invalid In Most States

It may be back to square 1 for Obamacare.

Moments ago, in what NBC classified as a "potentially lethal blow to Obamacare" a federal appeals court has ruled that the federal government may not subsidize health insurance plans bought by people in states that decided not to set up their own marketplaces under Obamacare. The law clearly says that states are to set up the exchanges. But 34 states opted not to, and the federal government took over in those states. The court ruled that federal government may not pay subsidies for insurance plans in those states.

As the Hill reports further, the D.C. Circuit Court of Appeals said the Affordable Care Act does not permit the IRS to distribute premium subsidies in the federal ObamaCare exchange, meaning those consumers must bear the full cost of their insurance.

But... they said socialism is for the greater good!? 

Appeals Court Strikes Down Federal Exchange Subsidies for Obamacare
By Sandhya Somashekhar

A federal appeals court panel in the District struck down a major part of the 2010 health-care law Tuesday, ruling that the tax subsidies that are central to the program may not be provided in at least half of the states.

The ruling, if upheld, could potentially be more damaging to the law than last month’s Supreme Court decision on contraceptives. The three-judge panel of the D.C. Circuit Court of Appeals sided with plaintiffs who argued that the language of the law barred the government from giving subsidies to people in states that chose not to set up their own insurance marketplaces. Twenty-seven states, most with Republican leaders who oppose the law, decided against setting up marketplaces, and another nine states partially opted out.

The government could request an “en banc” hearing, putting the case before the entire appeals court, and the question ultimately may end up at the Supreme Court. But if subsidies for half the states are barred, it represents a potentially crippling blow to the health-care law, which relies on the subsidies to make insurance affordable for millions of low- and middle-income Americans.

The subsidies are in many cases sizeable, sharply reducing the cost of coverage. In Wyoming, for example, the average consumer who bought a mid-grade plan on the federal marketplace is receiving a subsidy of around $444 per month, cutting the monthly payments to $99, according to federal figures.

Starting this year, it is mandatory to carry health insurance or pay a fine.
California and Florida lead the way for state and federal healthcare sign-up markets.

About 5.4 million people signed up for health insurance on the federal marketplace through the spring, the government says. Of them, about 87 percent received subsidies. 

Fed appeals court panel says most Obamacare subsidies illegal
By Dan Mangan

In a potentially crippling blow to Obamacare, a federal appeals court panel declared Tuesday that government subsidies worth billions of dollars that helped 4.7 million people buy insurance on are illegal.

The 2-1 ruling said such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia—not on the federally run exchange

"Section 36B plainly makes subsidies available in the Exchanges established by states," wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith.

"We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly."

Court Strikes Down Federal Obamacare Subsidies
By Maggie Fox

In a potentially lethal blow to Obamacare, a federal appeals court has ruled that the federal government may not subsidize health insurance plans bought by people in states that decided not to set up their own marketplaces under Obamacare.

The law clearly says that states are to set up the exchanges. But 34 states opted not to, and the federal government took over in those states. The court ruled that the federal government may not pay subsidies for insurance plans in those states.

"We reach this conclusion, frankly, with reluctance," District of Columbia Appeals Court judge Thomas Griffith writes in the 2-1 ruling, which the federal government will appeal.

Obamacare............................America, YOU Can't AFFORD this ""LIBERAL"" Screw JOB!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 
Reaction to Israeli troops entering Gaza

'Special Report' All-Star panel weighs in 

Kean/Hamilton: Terror threat enters danger zone
By Tom Kean and Lee Hamilton

A decade after release of 9/11 Report, there's progress, but we cannot let our guard down.

Ten years ago today, we released The 9/11 Commission Report to the government and the American public. Many of our 41 recommendations have been adopted, leaving our government better equipped to fight terrorism. That is progress, but we must not become complacent. Terrorists are still plotting attacks on our homeland and aviation systems. The trend lines overseas are pointing in the wrong direction.

Al-Qaeda spinoffs are gaining strength. The fanatical Islamic State of Iraq and Syria has conquered much of western Iraq. As we warned 10 years ago: If "Iraq becomes a failed state, it will go to the top of the list of places that are breeding grounds for attacks against Americans at home." That nightmare scenario may now be coming to pass.

Senior national security leaders are especially alarmed about the foreign fighters who have flooded into neighboring Syria. More than 1,000 hold European passports, which would enable many to enter the United States without a visa. Even worse, dozens of Americans have joined them. When these battle-hardened, radicalized fighters return to the U.S. and Europe, they will pose a serious threat.




Yellen encourages ‘fully-fledged equity bubble,’ says Jeremy Grantham

Jeremy Grantham blasts Janet Yellen and her predecessors at the Federal Reserve in his latest quarterly letter.

The Fed chairwoman is “sticking faithfully” to the “clearly wrong” policies of Alan Greenspan and Ben Bernanke, writes Grantham, who is the founder of Boston-based money manager GMO and has a reputation for sniffing out market bubbles early.

Grantham criticizes Fed officials for not learning from history:

Summer Essays, Volume 2
Jeremy Grantham

1. Bubbles Again: Setting Up for a Deal Frenzy
(pages 6-7)

2. Another Look at Malthus: Where Said To Be Wrong, He Was Right. And, Vice Versa.
(pages 7-8)

3. Two Afterthoughts on the Risks and Return of the Keystone Pipeline
(pages 8-9)

4. Investment Lessons Learned: Mistakes Made Over 47 Year 

Three Charts Of The Week: Money Printing Is Not Bringing Prosperity To Main Street
By David Stockman

Furious money printing by the world’s major central banks is not generating real growth and prosperity—–but professional economists never seem to get the word. As shown below, the 2014 outlook for global real growth has been marked down sharply since early 2013. Back then, of course, Abenomics and massive QE by the BOJ was supposed to cause the Japanese economy to soar; Draghi’s “anything it takes” bromide was going to jolt Europe out of its slump; and the elixir of QE3 was certain to finally cause the US economy to attain “escape velocity”.

Its not working out that way. In Japan, import inflation is soaring, real wages are still falling and the economy is entering a new slump in Q2 owing to a tax increase that was unavoidably necessary to pay for its runaway fiscal largesse. In Europe, the Bank Of Italy, Draghi’s home base, has now marked its forecast of 2014 real GDP growth to essentially zero. And in the US after the disastrous first quarter, along with what is shaping up to be a tepid second quarter, real growth will not achieve any kind of velocity, “escape” or otherwise; in fact, consensus real GDP has already been marked down to 1.7%—the lowest rate of expansion since the financial crisis. Accordingly, it is only a matter of time before the global forecast for 2014 shown below below is marked down even further.

Central Banks Balance Sheet 

FED Balance Sheet

European Banks Begin to Sweat As ECB Promises Scalps
By Don Quijones • July 21, 2014   

By Don Quijones, freelance writer, translator in Barcelona, Spain. Raging Bull-Shit is his modest attempt to challenge the wishful thinking and scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media. This article is a Wolf Street exclusive.

According to reports along the grapevine, many senior European bankers have begun to sweat, and not because of the harsh heat of high summer. They are sweating out of fear of what could happen as battalions of suited and booted financial auditors and regulators take up temporary residence at the headquarters of the continent’s biggest banks.

The new and no doubt far from welcome guests belong to the supervisory council of the European Central Bank. Their mission? To conduct the most expansive and exhaustive stress test ever conducted of the euro zone’s 132 biggest banks. Granted, given the outrageous failure of previous editions of European stress test to even detect the massive hemorrhaging on the balance sheets of Bankia and Dexia, just months before they suffered fatal financial embolisms, the bar is not exactly high.

Kyle Bass Europe AQR Banks!!!!!!!!!!!!!!!!!!!!!!! 

EUROPE...................................Totally SCREWED for the REST of this DECADE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!