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Friday, July 19, 2013

Forbidden Gates with Tom Horn

Detroit's Demise In One Chart

Presented with little comment aside to note that no matter how much free money is mis-allocated to a problem, the can-kicking eventually runs out of road and reality bites.

Via @EconomistNiraj - Detroit became the largest U.S. city to file for bankruptcy, with debts of about $18 billion.  
The population, which peaked at 1.85 million in 1950, has declined to about 700,000, according to U.S. Census data.
Manufacturing jobs have fallen from about 296,000 in 1950 to fewer than 27,000 in 2011.
Zero Hedge

Everything Is Fine, But…

Everything is going to be just great.  Haven't you heard?  The stock market is at an all-time high, Federal Reserve Chairman Ben Bernankesays that inflation is incredibly low, and the official unemployment rate has been steadily declining since early in Barack Obama's first term.  Of course I am being facetious, but this is the kind of talk about the economy that you will hear if you tune in to the mainstream media.  

They would have us believe that those running things know exactly what they are doing and that very bright days are ahead for America.  And it would be wonderful if that was actually true.  Unfortunately, as I made exceedingly clear yesterday, the U.S. economy has already been in continual decline for the past decade.  Any honest person that looks at those numbers has to admit that our economy is not even close to where it used to be.  But could it be possible that we are making a comeback?  Could it be possible that Obama and Bernanke really do know what they are doing and that their decisions have put us on the path to prosperity?  Could it be possible that everything is going to be just fine?
Sadly, what we are experiencing right now is a "mini-hope bubble" that has been produced by an unprecedented debt binge by the federal government and by unprecedented money printing by the Federal Reserve.  Once this "sugar high" wears off, it will be glaringly apparent that by "kicking the can down the road" Bernanke and Obama have made our long-term problems even worse.
Unfortunately, most Americans don't understand these things.
Most Americans just let their televisions do their thinking for them, and right now their televisions are telling them that everything is going to be fine.
But is that really the case?
Everything is fine, but the city of Detroit has just filed for Chapter 9 bankruptcy.  It will be the largest municipal bankruptcy in U.S. history...
Detroit filed for the largest municipal bankruptcy in U.S. history Thursday after steep population and tax base declines sent it tumbling toward insolvency.
The filing by a state-appointed emergency manager means that if the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment.
Wait a minute, didn't Barack Obama say that he "refused to let Detroit go bankrupt" less than a year ago?
Everything is fine, but continuing claims for unemployment benefits just spiked to the highest level since early 2009.
Everything is fine, but in the month of June spending at restaurants fell by the most that we have seen since February 2008.
Everything is fine, but Google's earnings for the second quarter came in way below expectations.
Everything is fine, but Microsoft's earnings for the second quarter came in way below expectations.
Everything is fine, but chip maker Intel has reported revenue declinesfor four quarters in a row.
Everything is fine, but the number of housing starts in June was the lowest that we have seen in almost a year.
Everything is fine, but the number of mortgage applications has dropped 45 percent since May.
Everything is fine, but the homeownership rate in America is now at its lowest level in nearly 18 years.
Everything is fine, but the United States is losing half a million jobsto China every single year.
Everything is fine, but the U.S. economy actually lost 240,000 full-time jobs last month.
Everything is fine, but the number of full-time workers in the United States is now nearly 6 million below the old record that was set back in 2007.
Everything is fine, but 40 percent of all U.S. workers make less than $20,000 a year at this point.
Everything is fine, but robots are starting to take over fast food jobs.  If working class Americans someday won't even be able to work at McDonald's, what will they do to earn money in the years ahead as the jobs disappear?
Everything is fine, but the average price of a gallon of regular gasoline has now reached $3.66.
Everything is fine, but the number of Americans on food stamps has increased by almost 50 percent while Obama has been in the White House.
Everything is fine, but the U.S. government is going to borrow about 4 trillion dollars in fiscal 2013.
Everything is fine, but worldwide business confidence has fallen to the lowest level since the last recession.
Everything is fine, but the Chairman of the Joint Chiefs of Staff just told Congress that Obama is considering using the U.S. military to intervene in the conflict in Syria.
Unfortunately, the cold, hard reality of the matter is that everything isnot fine.
As a nation, we consume far more wealth that we produce.
As a nation, we buy far more stuff from the rest of the world than they buy from us.
As a nation, our debt is growing at a much faster pace than our economy is.
As a nation, our share of global GDP has been dropping like a rock over the past decade.
Our economic infrastructure is being systematically gutted, Wall Street has been transformed into a gigantic casino and poverty in the United States continues to explode even in the midst of this so-called "economic recovery".
How in the world can the mainstream media get away with telling the American people that everything is just fine?
The economic fundamentals are absolutely screaming that massive trouble is on the horizon.  Hopefully people are getting ready, because a whole lot of pain is on the way for this country.
Economic Collapse

Fed Money Printing Causing Higher Everything, Zimmerman Designed to Distract

USDA Grants $149,074.00 to Study Food Shopping Patterns with GPS

The U.S. Department of Agriculture (USDA) has awarded a $149,074 grant to study food shopping patterns that may form the basis of future shopping "interventions.”

The USDA award went to the University of Kentucky in April for the study titled, “Adolescent and Parent Food Activity Patterns as Drivers of Food Choice and Behaviors."

According to the grant abstract, “There is limited research understanding how adolescents and their parents move within their daily lives which may influence their food choices and ultimately diet behavior."

The project will examine the influences on food shopping patterns, or as the proposal put it: "The overall goal of the proposed project is to examine the drivers of food shopping patterns, behaviors and food purchasing choices within the food activity space among adolescents and their parents.”

Some of the families involved in the study will be given GPS data recorders so researchers can conduct an "objective measure of the food environment."

The study's primary director Prof. Alison Gustafson tells CNSNews.com, “A lot of the work is on proximal deterrents -- things that are close to you that would bring you to a store. For example, shopping venues that are in a person’s travel pattern – in their daily route, they may pass certain types of food establishments.

“The GPS will help us map out a travel pattern, the geographic space and the number of food venues in this space. As well as the type -- grocery stores, gas stations or super centers,” Gustafson said.


Peter Schiff: “I Think The Dollar Is Going To Collapse Before The Market Does”

I had the opportunity this week to reconnect with Peter Schiff, CEO and Chief Global Strategist of Euro Pacific Capital.

It was a powerful interview, as Peter indicated the Fed is trapped in a long-term position of destroying the dollar, while mainstream voices cheer resultant new highs of the stock market. Such dollar debasement Peter explained, means “the price of gold is going to skyrocket”—once the negative propaganda wears off.

In response to this week’s conflicting policy statements issued by the Fed, Peter said, “They checked into the ‘Roach Motel’ of monetary policies because they can get in—but there’s no way to get out. So what they do is they bluff. They pretend there is an exit strategy knowing that exit is impossible…they just have to maintain the pretense as long as they can, before the market figures out the true predicament they’re in.”

“No matter what Ben Bernanke says, between now and the time he’s supposed to taper, he will come up with an excuse why he can’t and I think he already knows this. But he can’t let the market know that the whole recovery…is merely a temporary by-product of the QE, and that the minute you remove the QE—we’re right back in recession.”

When asked if continued money printing is setting the stage for an equities market collapse, Peter said, “I think the dollar is going to collapse before the market [does]…The Fed is propping up asset prices by debasing the dollar—the currency with which those asset prices are denominated.”

“So if you’re going to destroy your currency, then asset prices are not going to collapse…Another way you can look at it is expressed in gold…Stock and real estate prices expressed in gold are going to go down significantly over time. I know we’ve had a rally in asset prices in terms of gold recently…but I think that’s very temporary.”

In terms of the most beat-up sector in the marketplace at the moment, gold mining stocks, Peter indicated that they represent, “The greatest buying opportunity that I’ve seen during the entire bull market…Many gold stocks are actually priced even lower than they were a decade ago…So you got the opportunity to ‘roll back the clock’ to the time where gold was under $300 oz…[but] I’m not sure how long this window of opportunity will be open…hopefully people will take advantage of it.”

Speaking also to the cost-struggles these companies have suffered through, Peter said, “Gold has not gone up as fast as the cost of mining it, because everybody is convinced there is no inflation. They believed the propaganda from the central banks and governments, and so gold has not even gone up to reflect the increased cost of mining it…but I think eventually…the price of gold is going to skyrocket and the miners are going to literally be gold mines. Right now they’re not—but I think eventually they will be.”

As a final comment towards the ‘madness of crowds’, Peter said, “The majority is always going to be wrong…the mob has such a vested interest in believing in a fantasy, that they can’t reject it…[even] in light of evidence that would seemingly prove them wrong.”

“[But] I think those of us who can see through all the B.S.—we know how this game is going to end. We know where the puzzle pieces need to be and we just have to position ourselves accordingly…The fundamentals are going to win out in the end regardless of how far they deviate…[even] during these periods of mania.”

This was another powerful interview with one of the true market visionaries of our time. It is required listening for serious investors and market students.

Bull Market Thinking

Scientist discovery of two new jumbo-sized viruses

The discovery of two new jumbo-sized viruses is blurring the lines between viral and cellular life and could point to the existence of a new type of life, scientists suggest.

The two large viruses, detailed in this week's issue of the journal Science, have been dubbed "Pandoraviruses" because of the surprises they may hold for biologists, in reference to the mythical Greek figure who opened a box and released evil into the world.

The discovery of Pandoraviruses is an indication that our knowledge of Earth's microbial biodiversity is still incomplete, explained study coauthor Jean-Michel Claverie, a virologist at the French National Research Agency at Aix-Marseille University.

"Huge discoveries remain to be made at the most fundamental level that may change our present conception about the origin of life and its evolution," Claverie said.

Eugene Koonin, a computational evolutionary biologist at the National Center for Biotechnology Information in Bethesda, Md., who was not involved in the study, called the Pandoraviruses a "wonderful discovery," but not a complete surprise.

"In a certain sense, it's something that we saw coming, and it's wonderful that it has come," Koonin said.

Read more: http://www.foxnews.com/science/2013/07/18/jumbo-viruses-hint-at-fourth-domain-life/#ixzz2ZV5ZsMQS

EU officially publishes settlement guidelines despite Israeli objections

The European Union, as expected, published new guidelines limiting interaction with Israeli entities beyond the pre-1967 lines on Friday, with European Union foreign policy chief Catherine Ashton saying that this is in no way meant to "prejudge the outcome of peace negotiations between Israel and the Palestinians."

The statement said that the guidelines "reiterate the long-held position that bilateral agreements with Israel do not cover the territory that came under Israel's administration in June 1967."

She said this was done now to clarify the EU position before negotiations with Israel over financial agreements that will commence in 2014.

In an apparent reference to Israel's angry reaction and claims that the EU is essentially prejudging the outcome of negotiations, Ashton said that this is not the case, and that it "has been the EU's long-held position that it will recognize changes made to the borders once agreed by both parties."

The EU , she said, is "deeply committed" to the negotiations, and fully supports US Secretary of State John Kerry's intense efforts to restart negotiations at a particularly delicate time.

Israel has said that the move at this time does serious damage to Kerry's efforts because it gives the Palestinians the impression that the Europeans back their demands that the baseline for the talks be the June 4, 1967 lines.

Ashton said that the new guidelines will not be implemented before January 1, and in the meantime she has invited Israel to hold discussions on "the territorial scope of agreements with the EU that are currently under preparation."

What this means essentially is that the two sides will try to hash out language on the "territorial clause" that both sides can live with.

The guidelines do not spell out exactly what the so called “territorial clause” on future agreements will say.

For instance, in the recently signed Open Skies aviation agreement, the territorial clause reads: “The application of this agreement is understood to be without prejudice to the status of the territories that came under Israel’s administration after June 1967.” A senior diplomatic official said this was language Israel could live with.

An example of language Jerusalem would not sign, he added, was the draft of the next stage of the Euro-Med Youth Program, which read: “This agreement will be implemented in conformity with the European Union’s position that the territories that came under Israel’s administration in June 1967 are not part of the territory of Israel.”

The discussion between the two sides will now apparently be aimed at finding a formula that both sides are comfortable with.

Jerusalem Post

Detroit Files Chapter 9 Bankruptcy As Moody's Raises US Outlook

Change you can believe in with Detroit filing Chapter 9. But, really, adjusted for AFS, one-time items and a stock buyback which was pending but never fully effected, it is only a Chapter 11 and thus bullish.

Wait, wait, we know: it's the weather's fault. Also, soaring gas prices mean much more weather is coming.

And in an example of absolutely sublime timing, Uncle Warren's Moody's just hiked its oulook on the US from negative to stable. It is unclear if the opinion included the following line: "AAA+++ utopia; would gladly accept more bribes from any time", but it contained the following piece de resistance:

Zero Hedge

Town To Issue Licenses and Bounties To Shoot Down Drones: “They Fly In Town, They Get Shot Down”