Submitted by Tyler Durden on 02/21/2015 21:00 -0500
Three years after the Tohoku earthquake in Japan, citizens and the international community are left wondering if Japan really does have the situation in Fukushima under control… “TEPCO’s own engineers are clueless… nobody knows how much [radiation] is washing into the ocean.”
VICE Season 2 “Playing with Nuclear Fire”
Submitted by Tyler Durden on 01/15/2015 06:07 -0500
“As if millions of macro hedge funds suddenly cried out in terror and were suddenly silenced”
Over two decades ago, George Soros took on the Bank of England, and won. Less than two hours ago the Swiss National Bank took on virtually every single macro hedge fund, the vast majority of which were short the Swiss Franc and crushed them, when it announced, first, that it would go further into NIRP, pushing its interest rate on deposit balances even more negative from -0.25% to -0.75%, a move which in itself would have been unprecedented and, second, announcing that the 1.20 EURCHF floor it had instituted in September 2011, the day gold hit its all time nominal high, was no more.
What happened next was truly shock and awe as algo after algo saw their EURCHF 1.1999 stops hit, and moments thereafter the EURCHF pair crashed to less then 0.75, margining out virtually every single long EURCHF position, before finally rebounding to a level just above 1.00, which is where it was trading just before the SNB instituted the currency floor over three years ago.
Visually:
The SNB press release:
Swiss National Bank discontinues minimum exchange rate and lowers interest rate to –0.75%
Target range moved further into negative territory
The Swiss National Bank (SNB) is discontinuing the minimum exchange rate of CHF 1.20 per euro. At the same time, it is lowering the interest rate on sight deposit account balances that exceed a given exemption threshold by 0.5 percentage points, to ?0.75%. It is moving the target range for the three-month Libor further into negative territory, to between –1.25% and -0.25%, from the current range of between -0.75% and 0.25%.
The minimum exchange rate was introduced during a period of exceptional overvaluation of the Swiss franc and an extremely high level of uncertainty on the financial markets. This exceptional and temporary measure protected the Swiss economy from serious harm. While the Swiss franc is still high, the overvaluation has decreased as a whole since the introduction of the minimum exchange rate. The economy was able to take advantage of this phase to adjust to the new situation.
Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified.
The SNB is lowering interest rates significantly to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions. The SNB will continue to take account of the exchange rate situation in formulating its monetary policy in future. If necessary, it will therefore remain active in the foreign exchange market to influence monetary conditions.
The resultant move across all currency pairs has seen the EUR and USD sliding, the USDJPY crashing, and US futures tumbling even as European stocks plunged only to kneejerk higher as markets are in clear turmoil and nobody knows just what is going on right now.
In case you hadn’t noticed, the MSM storyline was obliterated this morning with the December retail sales report. There is absolutely no way for the shysters and charlatans in the media, Wall Street or government to spin this data in a positive manner. The shit is hitting the fan. A recession for the average American is confirmed. Plunging gas prices haven’t done shit to motivate people to spend money they don’t have.
And guess what you won’t hear from CNBC or any of the corporate media?
You see, that was the storyline last year to explain the terrible December and January retail sales. So let me get this straight. Last December the country was buried under snow in sub-zero temperatures versus a tranquil, calm, non-snowy December this year. Not a peep from The MSM about last December’s Polar vortex
Shouldn’t this great weather, “fabulous” plunge in the unemployment rate, and billions of dollars put back into pockets by collapsing gas prices, have spurred an awesome retail sales surge this year? The Wall Street shysters drove the stock market to record highs in December based on this false storyline. The decline in real wages in November revealed the falsehood of the jobs recovery. Any savings from lower gas prices is being used to pay down credit card debt and pay for the dramatically higher healthcare costs caused by Obamacare.
This economy is in the tank and headed lower. The GDP numbers are a sham. The employment numbers are a sham. You know it. I know it. And now the sheep are waking up and realize they have been lied to. Stock market records are meaningless to people trying to get by on a daily basis.
After perusing the data on the Census Bureau website, here are my observations:
It seems the markets don’t like it. The pain has just begun. A global recession is underway. It’s a deflationary unwinding of debt and mal-investment. There is no cure except for collapse. Central bankers have shot their load. Their credibility is shot. No one believes more debt will cure a debt problem – except for a few Ivy League educated economists. A shitstorm is a brewing. Get ready.
I wonder who could have predicted this. Oh Yeah. Me. I wrote Subprime Auto Nation in September 2012. The entire auto recovery storyline peddled to the masses over the last few years is a sham. It’s just another Federal Reserve easy money created subprime bubble. Ally Financial and the rest of the Wall Street criminal syndicate have doled out subprime auto loans to any high school dropout that can fog a mirror, quicker than Bill Clinton does interns. The entire scheme was to give the appearance of an economic recovery and not worry about the future losses. The taxpayer would pick those up. The falsity of the fantastic auto sales meme is proven by the fact that automaker profits have fallen and their stocks are lower than they were in 2010.
Now the chickens are coming home to roost. 1 out of 12 subprime borrowers have failed to make payments within the first nine months of taking the loan. I wonder how many will make all the payments over the 7 years of their loan?
WTF did highly educated finance professionals think would happen when you loaned Shaquesha Jackson, with a 630 credit score, $40,000 to buy a Cadillac Escalade? Did they think she would make the payments with her EBT card? Did the fact she had defaulted on prior loans convince them she had learned her lesson? There are $40,000 vehicles all over West Philly, parked in front of $25,000 hovels. Who in their right mind thought lending money to these people for a rapidly depreciating vehicle was a good idea? Only an Ivy League educated Princeton economist could think this would work. Or maybe they just wanted to keep the ponzi going long enough to exit the Federal Reserve and start making $300,000 per lunchtime speech about how he saved the world.
The delinquency rates on all car loans at 2.6% are already approaching 2008 levels. I might want to remind you the government and MSM have been telling you we are in the midst of a strong economic recovery. As 2015 erodes into a greater depression, these default rates will soar well past 2008-2009 levels. The coming shitstorm created by the easy money mal-investment over the last five years is going to be epic.
Submitted by Tyler Durden on 01/09/2015 10:14 -0500
Just 2 days after President Obama reflected on his glorious ‘save’ of the US auto industry – forgetting to explain how so much of this ‘buying frenzy’ has been predicated on massive low-quality-borrower-based credit extensions – The Wall Street Journal bursts the bubble of ‘contained-ness’. Auto loan delinquency rates are surging to levels not seen since 2008 and stunningly, more than 8.4% of borrowers with weak credit scores who took out loans in the first quarter of 2014 had missed payments by November. As even glass-half-full-status-quo-hugger Mark Zandi is forced to admit, “It’s clear that credit quality is eroding now, and pretty quickly.”
As The Wall Street Journal reports,
You know a liberal is lying when they open their mouth. Obamacare is being unleashed in all its fury on the American people and businesses in 2015. The IRS is coming for you. I love when I read stories from liberals about Obamacare premiums dropping in some states. That’s priceless. These lying douchebags never talk about deductibles. Obamacare is supposed to save millions of poor folks from the ravages of healthcare costs.
Bronze plans, which cover about 60% of medical costs, are the most popular and cheapest individual and family plans sold outside the government-run Obamacare exchanges. Silver plans, which cover about 70% of health benefit costs, are by far the most popular plans sold on those exchanges.
Here are the facts regarding Obamacare deductibles:
People with company plans have average deductibles of $1,200. The average middle class family lives paycheck to paycheck. How are they going to come up with the $5,000 or $10,000 to pay the deductible. They’re not. They will either not seek care or they will stiff the provider when the bill arrives. You, the taxpayer, will foot the bill. Just like Obama always wanted.
Obamacare was designed such that its most harmful provisions would not be implemented until after the President had been returned to office for a second term and his Democrat accomplices had been reelected to their congressional seats. Fortunately for the nation, the latter part of that strategy was a spectacular failure. Nonetheless, it did provide the public with a temporary reprieve from the health care law’s most painful exactions. That brief respite is now at an end. This year, you will begin to experience the realities of “reform” first hand and you are not going to like how it feels.
In fact, you are probably already feeling the first twinges without recognizing that their source is Obamacare. If you are among the 150 million Americans who get health insurance through their employers, for example, chances are that the coverage your company offered for 2015 has much higher premiums than did last year’s plan. The President and his toad eaters in the legacy media will do their best to convince you that these increases are caused by insurance company avarice, but this is merely another lie they are peddling in the hope that they can save Obama’s “signature domestic achievement.”
The actual cause was the looming employer mandate and other Obamacare regulations that took effect January 1. The mandate and accompanying red tape dramatically increase the cost of employee health insurance for companies with 100 or more full-time-equivalent workers. It requires all such firms to offer “minimum essential” coverage to 70 percent of their full-time employees or pay huge fines. These PPACA-mandated benefits are expensive, and very few small-to-medium sized employers can unilaterally absorb the costs of such “essential” coverage. So you get to share the pain.
But your premiums are just the start. The real pain will come when you need medical services. Your new plan probably has a far higher deductible and co-pay requirement than your old one. Consequently, when you see a doctor or have a test performed, you’ll have to pay the entire cost. This need to pay for such services out-of-pocket despite being insured, according to USA Today, is already causing people to forego care: “A recent Commonwealth Fund survey found that four in 10 working-age adults skipped some kind of care because of the cost, and other surveys have found much the same.”
It gets worse. Even if you’re willing and able to dig into your wallet to pay for an office visit, it doesn’t necessarily mean that you can see a doctor in a timely fashion. The primary care physician on whom you and most Americans have long relied for basic medical care is an endangered species. As the AP reports, “A survey this year by The Physicians Foundation found that 81 percent of doctors describe themselves as either over-extended or at full capacity, and 44 percent said they planned to cut back on the number of patients they see, retire… or close their practice to new patients.”
Is it fair to blame Obamacare for the extinction of the PCP? Yes. PPACA creates incentives for doctors to leave the system. It was, for example, used to disguise an outrageous bait-and-switch that duped doctors into accepting millions of new patients now “covered” by Medicaid. However, as the New York Times reported last week, “The Affordable Care Act provided a big increase in Medicaid payments for primary care in 2013 and 2014. But the increase expires on [January 1].” These physicians, according to the Times, “will see their fees for primary care cut by 43 percent, on average.”
And, adding insult to injury, the Obama administration says that these PCPs have “no legal right to challenge the adequacy of payments they received from Medicaid.” They were suckered into accepting Medicaid patients and are now being told they must accept payment rates that don’t even cover their overhead costs. After such a betrayal by the administration that promised to reform the health care system while busily herding millions of patients into a Potemkin coverage program like Medicaid, is it really any wonder nearly half of the nation’s primary care doctors are eyeing the exit?
If you can’t get a timely appointment with a PCP because so many are swamped by new patients “covered” by Medicaid, where do you go for care? The ER? Well, no. That option is now even less palatable than it was in the bad old days before the advent of Obamacare. The New York Post reports, “The Colorado Hospital Association found that the average number of ER visits in states that expanded Medicaid increased by 5.6 percent, when the second quarter of this year was compared with the same period in 2013.” This dwarfed such increases in states that declined to expand Medicaid.
However, as with PCPs, you may soon lose your access to a nearby ER even if you’re willing to endure long wait times and overcrowding. Why? Obamacare is also destroying the community hospital system. Becker’s Hospital Review reported in September that 20 hospitals had gone under during the first eight months of 2014. That’s more than 2 per month, about twice the 2013 closure rate. How is PPACA wreaking such havoc? It is adding expensive regulatory burdens to hospitals while reducing payments for patients covered by government programs like Medicare and, of course, Medicaid.
Welcome to the brave new world of U.S. health care as reformed by the President and congressional Democrats. It is precisely the opposite of what most Americans wanted from reform. Eight months before Obamacare passed, Gallup conducted a survey in which a majority of the public unequivocally stated that controlling costs was its highest priority. Obamacare is actually increasing costs for both patients and providers, while reducing access for the former. And this is just the beginning. The pain will continue to increase until this malignant tumor is cut out of our health care system.
Having government entities provide low down payment mortgages to people who can’t afford to buy a house is always a good move. Keynesians like Krugman approve wholeheartedly. The housing market will get a nice boost and the working taxpayers will fund the bad debt through Fannie and Freddie. You own Fannie and Freddie. Everyone wins.
In case you forgot, the closing costs to sell a house are usually 8% of the home price. So these home buyers are immediately 5% underwater when they move in.
Sometimes I can’t believe I live in a world this fucked up. And no one notices and no one cares.
Where are the Republicans we elected to stop this shit?
Guest Post by Anthony Sanders
Here we go again! Mortgage giants Fannie Mae and Freddie Mac have now officially approved 3% down payment mortgages.
According to Brena Swanson at Housing Wire,
“The new lending guidelines released today by Fannie Mae and Freddie Mac will enable creditworthy borrowers who can afford a mortgage, but lack the resources to pay a substantial down payment plus closing costs, to get a mortgage with 3% down. These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices,” FHFA Director Mel Watt said.
“To mitigate risk, Fannie Mae and Freddie Mac will use their automated underwriting systems, which include compensating factors to evaluate a borrower’s creditworthiness. In addition, the new offerings will also include homeownership counseling, which improves borrower performance. FHFA will monitor the ongoing performance of these loans,” Watt continued.
What are these compensating factors? Lower down payment mortgages required higher credit scores among other things. Also, the 3% down loans are intended only to first-time buyers, buyers who haven’t owned a home for at least a few years and those with lower incomes. Many of the loans will also require borrowers to undergo home-buyer counseling before making a purchase.
But will this work? Not unless the labor market increases substantially.
House price growth is slowing, but is still over 2x wage growth.
Let’s hope low downpayment loans perform better than the last time!!!!!
Submitted by Tyler Durden on 12/07/2014 14:51 -0500
Not a quarter passes without the Bank of International Settlements (BIS) aka central banks’ central bank (also the locus of some of the most aggressive manipulation of gold and FX in human history) reiterating a dire warning about the fire and brimstone that is about to be unleashed upon the global economy.
It started in June of 2013, when Jaime Caruana, certainly the most prominent doom and gloomer at the BIS (who also was Governor of the Bank of Spain from 2000 to 2007 when this happened) asked if “central banks [can] now really do “whatever it takes”? As each day goes by, it seems less and less likely… [seven] years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy…. low-interest policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system. Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the cure…in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.”
The BIS’ preaching did not end there, and hit a new crescendo in June of 2014, when in its 84th Annual Report, the BIS slammed “Market Euphoria”, and found a “Puzzling Disconnect” between the economy and the market”:
“it is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally“, that “despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions” and that “the temptation to go for shortcuts is simply too strong, even if these shortcuts lead nowhere”… “Particularly for countries in the late stages of financial booms, the trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on.”
“The global economy continues to face serious challenges. Despite a pickup in growth, it has not shaken off its dependence on monetary stimulus. Monetary policy is still struggling to normalise after so many years of extraordinary accommodation. Despite the euphoria in financial markets, investment remains weak. Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions. And despite lacklustre long-term growth prospects, debt continues to rise. There is even talk of secular stagnation.
Financial markets are euphoric, but progress in strengthening banks’ balance sheets has been uneven and private debt keeps growing.
It did not end there either. In September of 2014, the warnings continued:
… the search for yield – a dominant theme in financial markets since mid-2012 – returned in full force. Volatility fell back to exceptional lows across virtually all asset classes, and risk premia remained compressed. By fostering risk-taking and the search for yield, accommodative monetary policies thus continued to support elevated asset price valuations and exceptionally subdued volatility.
The spell of market volatility proved to be short-lived and financial markets resumed their rally soon afterwards. By early September, global equity markets had recouped their losses and credit risk spreads once again consolidated at close to historical lows. While geopolitical worries kept weighing on financial market developments, these were ultimately superseded by the anticipation of further monetary policy accommodation in the euro area, providing support for asset prices.
The warnings continued. Earlier today, the BIS released its latest Quarterly Review report, where the most prominent warning this time revolves around the inverse Plaza Accord surge in the US Dollar whose dramatic, concentrated surge in recent months is unparalleled in history. In a nutshell, in “Currency movements drive reserve composition“, BIS’ McCauley and Chan warn that, in Ambrose Evans-Pritchard’s words, “off-shore lending in US dollars has soared to $9 trillion and poses a growing risk to both emerging markets and the world’s financial stability.”
From the full report:
The appreciation of the dollar against the backdrop of divergent monetary policies may, if persistent, have a profound impact on the global economy, in particular on EMEs. For example, it may expose financial vulnerabilities as many firms in emerging markets have large US dollar-denominated liabilities. A continued depreciation of the domestic currency against the dollar could reduce the creditworthiness of many firms, potentially inducing a tightening of financial conditions.
Or it may not: because this is essentially a carbon copy of the warnings that were issued after Bernanke first hinted at tapering in May of 2013, leading to the Taper TantrumTM, which led to some short-term volatility which were promptly soothed by even more central bank liquidity flooding what’s left of the capital “markets.”
A chunk of China’s borrowing is disguised as intra-firm financing. This replicates practices by German industrial companies in the 1920s, which hid their real level of exposure as the 1929 debt trauma was building up. “To the extent that these flows are driven by financial operations rather than real activities, they could give rise to financial stability concerns,” said the BIS in its quarterly report.
“More than a quantum of fragility underlies the current elevated mood in financial markets,” it warned. Officials are disturbed by the “risk-on, risk-off, flip-flopping” by investors. Some of the violent moves lately go beyond stress seen in earlier crises, a sign that markets may be dangerously stretched and that many fund managers do not really believe their own Goldilocks narrative.
“Mid-October’s extreme intraday price movements underscore how sensitive markets have become to even small surprises. On 15 October, the yield on 10-year US Treasury bonds fell almost 37 basis points, more than the drop on 15 September 2008 when Lehman Brothers filed for bankruptcy.”
“These fluctuations were large relative to actual economic and policy surprises, as the only notable negative piece of news that day was the release of somewhat weaker than expected retail sales data for the US one hour before the event,” it said.
The BIS said 55pc of collateralised debt obligations (CDOs) now being issued are based on leveraged loans, an “unprecedented level”. This raises eyebrows because CDOs were pivotal in the 2008 crash.
“Activity in the leveraged loan markets even surpassed the levels recorded before the crisis: average quarterly announcements during the year to end-September 2014 were $250bn,” it said.
BIS officials are worried that tightening by the US Federal Reserve will transmit a credit shock through East Asia and the emerging world, both by raising the cost of borrowing and by pushing up the dollar.
But it’s best to leave it to the BIS itself, where this time Claudio Borio picks up the torch left by Jaime Caruana. What is notable is that none other than the BIS slams the infamous, and now legendary intervention by James “QE4” Bullard to assure the S&P’s levitation continues without a hitch!
To my mind, these events underline the fragility – dare I say growing fragility? – hidden beneath the markets’ buoyancy. Small pieces of news can generate outsize effects. This, in turn, can amplify mood swings. And it would be imprudent to ignore that markets did not fully stabilise by themselves. Once again, on the heels of the turbulence, major central banks made soothing statements, suggesting that they might delay normalisation in light of evolving macroeconomic conditions. Recent events, if anything, have highlighted once more the degree to which markets are relying on central banks: the markets’ buoyancy hinges on central banks’ every word and deed.
Wait, so the central banks’ central bank is openly chastising one of its own now and for what: for stabilizing the market and preserving the unstable euphoria that the BIS has been warning about for so long?
Does this mean that the BIS is now openly calling for a crash? Perhaps, what is clear is that even the BIS, or the “good cop” (if only for the middle-class, certainly bad cop for the 0.01%-ers) is now shocked by just how broken the markets have become as summarized in the following line:
The highly abnormal is becoming uncomfortably normal. Central banks and markets have been pushing benchmark sovereign yields to extraordinary lows – unimaginable just a few years back. Three-year government bond yields are well below zero in Germany, around zero in Japan and below 1 per cent in the United States. Moreover, estimates of term premia are pointing south again, with some evolving firmly in negative territory. And as all this is happening, global growth – in inflation-adjusted terms – is close to historical averages. There is something vaguely troubling when the unthinkable becomes routine.
So yes, thank you for confirming – years after most who still follow the farce that is the “market” with an open mind – just how absolutely broken it is thanks to central bankers.
And here is the rub, because for the BIS to be complaining about broken markets is nothing short of peak hypocrisy.
Why? Exhibit A: the BIS board of directors.
So, dear BIS thinkers, philosophers, and commentators: the next time you wish to warn the general public about how fucked up everything has become, maybe you can throw some of these “rational” ideas around your next Board meeting first and ask the economist sociopaths who are sitting on the CTRL-P buttons at printing presses around the globe to maybe take it a little easier with the wholesale, worldwide destruction of not only fiat currency but every single “market”.
Oh, and while you are at it, please tell Benoit Gilson to slam paper gold to triple (and, if possible, double) digits ASAP: unlike the world’s chasers of momentum who only buy an asset if it becomes more expensive on hopes greater fools will buy it back from them, there are those who actually know a good deal that won’t last when they see it.
This was an unequivocal disaster. All the hype. All the deals. All the advertising. All the extra hours. And sales PLUMMET by 11% versus a shitty Black Friday weekend last year. You will see bullshit excuses like on-line sales surging. Well here is the deal. Annual retail sales are about $5 trillion. On-line sales are less than $500 billion. If bricks and mortar sales decline by 11% and on-line sales go up by 20%, total sales still decline by 8%.
Black Friday is so named because it was when retailers would go into the black (profitable). It looks like this was a Red weekend. This will be the holiday season where the marginal retailers will begin to fall by the wayside. RadioShack will declare bankruptcy. Sears and JC Penney will lose hundreds of millions.
The economic recovery storyline is complete and utter bullshit. The average American can barely pay their monthly bills. If the storyline was true, there is no way retail sales would be collapsing year over year. Oil prices are deflating. Consumer spending is deflating. Wages are deflating. Global commerce is deflating. The central banks have pumped out more fiat in the last five years than had been created in world history, and their grand experiment has failed.
The shit is hitting the fan and the willfully ignorant masses don’t have a clue. The mood in the country is darkening. The mass media will keep peddling propaganda and falsity right until the end. It’s their job.
By Shelly Banjo
Published: Nov 30, 2014 2:56 p.m. ET
Retail spending over the Thanksgiving weekend fell 11%, its second straight annual decline, according to the main industry trade group, a sign that flashy discounts during the four-day shopping bonanza weren’t enough to prompt increased sales.
Total spending from Thursday through Sunday sank 11% from a year earlier to $50.9 billion, according to the National Retail Federation. Shoppers spent an average $380.95, down 6.4% from $407.02 a year earlier.
NRF CEO Matt Shay attributed the drop to a combination of factors, including the fact that retailers moved promotions earlier this year in attempt to get people out sooner and avoid what happened last year when people didn’t finish their shopping because of bad weather.
He also attributed the declines to better online offerings and an improving economy where “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals.”
You have 360,000 frauds who faked their income levels. You have another 966,000 illegals who have fraudulently signed up. It seems the PR number of 8 million enrollees is really 6.7 million. And these are just the frauds the administration is admitting to. You know it is far worse. There are probably 5 million legitimate enrollees and most of them already had insurance coverage before Obamacare. This abortion of a program was sold to the American people as the salvation for the 30 million uninsured Americans. Obama has managed to drive healthcare premiums up by 50% to 100% since 2009 and has only covered 10% of the uninsured population. I can’t understand why the Democrats don’t want to run on their prize piece of legislation and Obama has delayed the really bad shit until 2015 after the elections. What a clusterfuck.
The Obama administration announced Monday it will cut off tax subsidies to about 360,000 people if they do not offer proof of their income in the next two weeks.
Officials will send final notices this week to individuals who signed up for ObamaCare with income levels that didn’t match government records. The announcement marks the administration’s first move to tackle the politically charged issue of income verification, which has remained a key GOP argument against the healthcare reform law.
Those who don’t confirm their income levels could lose their tax credit and face higher premiums and higher deductibles.
Nearly 90 percent of the 8 million people who signed up for ObamaCare have received government subsidies. The average consumer pays $82 per month for a $346 plan, receiving an average subsidy of $264.
The administration had already warned that it would end coverage for the 966,000 individuals whose immigration status could not be confirmed by the government.
About 115,000 people will lose coverage this month if they do not submit their paperwork, Andy Slavitt, principal deputy administrator at the Centers for Medicare and Medicaid Services, told reporters Monday.
A total of 1.2 million people have had income inconsistencies since the launch of ObamaCare last year. About 800,000 people have since submitted verification.
The federal government is still missing paperwork for nearly a half-million people who signed up for insurance over the last year. Slavitt stressed that individuals may be able to regain their coverage during a special enrollment period if they can prove their citizenship status or income level.
The administration will continue calling and sending letters to individuals who have not submitted the paperwork. Many have already been contacted up to a dozen times, Slavitt said.He stressed that people with income verification issues will not lose their coverage.
“If people still pay their premiums and can demonstrate their eligibility, they’ll continue to be enrolled,” Slavitt said Monday.
Many of the verification problems stem from the HealthCare.gov website, which experienced technical glitches throughout its rollout. Slavitt was brought this year in to resolve some of the problems.
Some immigration advocates have blamed the website as a barrier for people trying to provide documentation of their citizenship.
“I’m hopeful and confident that people will continue to respond to a greater degree,” Slavitt said, predicting a last-minute surge before the deadline. “We recognize that we still have work to do here.”
At a hearing last week by the House Ways and Means subcommittee on health, Republicans accused the Obama administration of using “the honor system” when asking consumers to self-disclose their income.
“That’s why the White House has lost, in my view, the trust of the American people,” subcommittee Chairman Kevin Brady (R-Texas) told Slavitt at the hearing.
Sounds of silence from the mainstream media and the scumbags at the mega-retailer. The Target breach was over 40 million credit cards. This breach looks much larger.
Via Brian Krebs
New data gathered from the cybercrime underground suggests that the apparent credit and debit card breach at Home Depot involves nearly all of the company’s stores across the nation.
Evidence that a major U.S. retailer had been hacked and was leaking card data first surfaced Monday on the cybercrime store rescator[dot]cc, the shop that was principally responsible for selling cards stolen in the Target, Sally Beauty, P.F. Chang’s and Harbor Freight credit card breaches.
As with cards put up for sale in the wake of those breaches, Rescator’s shop lists each card according to the city, state and ZIP code of the store from which each card was stolen. See this story for examples of this dynamic in the case of Sally Beauty, and this piece that features the same analysis on the stolen card data from the Target breach.
The ZIP code data allows crooks who buy these cards to create counterfeit copies of the credit and debit cards, and use them to buy gift cards and high-priced merchandise from big box retail stores. This information is extremely valuable to the crooks who are purchasing the stolen cards, for one simple reason: Banks will often block in-store card transactions on purchases that occur outside of the legitimate cardholder’s geographic region (particularly in the wake of a major breach).
Thus, experienced crooks prefer to purchase cards that were stolen from stores near them, because they know that using the cards for fraudulent purchases in the same geographic area as the legitimate cardholder is less likely to trigger alerts about suspicious transactions — alerts that could render the stolen card data worthless for the thieves.
This morning, KrebsOnSecurity pulled down all of the unique ZIP codes in the card data currently for sale from the two batches of cards that at least four banks have now mapped back to previous transactions at Home Depot. KrebsOnSecurity also obtained a commercial marketing list showing the location and ZIP code of every Home Depot store across the country.
Here’s the kicker:
A comparison of the ZIP code data between the unique ZIPs represented on Rescator’s site, and those of the Home Depot stores shows a staggering 99.4 percent overlap.
A comparison of the ZIP code data between the unique ZIPs represented on Rescator’s site, and those of the Home Depot stores shows a staggering 99.4 percent overlap.
Home Depot has not yet said for certain whether it has in fact experienced a store-wide card breach; rather, the most that the company is saying so far is that it is investigating “unusual activity” and that it is working with law enforcement on an investigation. Here is the page that Home Depot has set up for further notices about this investigation.
I double checked the data with several sources, including with Nicholas Weaver, a researcher at the International Computer Science Institute (ICSI) and at the University California, Berkeley. Weaver said the data suggests a very strong correlation.
“A a 99+ percent overlap in ZIP codes strongly suggests that this source is from Home Depot,” Weaver said.
Here is a list of all unique ZIP codes represented in more than 3,000 debit and credit cards currently for sale on Rescator’s site (Rescator limits the number of cards one can view to the first 33 pages of results, 50 cards per page). Here is a list of all unique Home Depot ZIP codes, in case anyone wants to double check my work.
In all, there were 1,822 ZIP codes represented in the card data for sale on Rescator’s site, and 1,939 unique ZIPs corresponding to Home Depot store locations (while Home Depot says it has ~2,200 stores, it is safe to assume that some ZIP codes have more than one Home Depot store). Between those two lists of ZIP codes, there are 10 ZIP codes in Rescator’s card data that do not correspond to actual Home Depot stores.
Finally, there were 127 ZIP codes for Home Depot stores that were not in the list of ZIPs represented in Rescator’s card data. However, it’s important to note that the data pulled from Rescator’s site is almost certainly a tiny fraction of the cards that his shop will put up for sale in the coming days and weeks.
What does all this mean? Well, assuming Home Depot does confirm a breach, it could give us one way to determine the likely size of this breach. The banks I spoke with in reporting this story say the data they’re looking at suggests that the breach probably started in late April or early May. To put that in perspective, the Target breach impacted just shy of 1,800 stores, lasted for approximately three weeks, and resulted in the theft of roughly 40 million debit and credit card numbers. If a breach at Home Depot is confirmed, and if this analysis is correct, this breach could be much, much bigger than Target.
How does this affect you, dear reader? It’s important for Americans to remember that you have zero fraud liability on your credit card. If the card is compromised in a data breach and fraud occurs, any fraudulent charges will be reversed. BUT, not all fraudulent charges may be detected by the bank that issued your card, so it’s important to monitor your account for any unauthorized transactions and report those bogus charges immediately.
You were wondering why retailers are reporting dreadful results? Look no further than Obamacare. Manufacturers overwhelmingly report higher employee contributions, deductibles, out-of-pocket maximums and copays, with a lower range of medical coverage and a lower size and breadth of the network.
Have your health insurance costs gone down since Obamacare was passed in 2009? And now for the best part. Obama illegally delayed all the really bad stuff until after the November elections. It seems the Democrats don’t want to run on this abortion of a program.
I’m still waiting for my $2,500 of savings. I’m sure the check is in the mail.
Was Dear Leader misquoted?
Submitted by Tyler Durden on 08/21/2014 10:35 -0400
Remember all those allegations that Obamacare would be an unmitigated disaster for businesses, especially smaller companies? Well, now we have proof.
As the Philly Fed, which mysteriously soared at the headline level even as the vast majority of its components tumbled, reported moments ago, “in special questions this month, firms were asked qualitative questions about the effects of the Affordable Care Act (ACA) and how, if at all, they are making changes to their employment and compensation, including benefits.”
What the survey found was very disturbing: not only did businesses report that as a result of Obamacare the number of workers they employ is lower than higher (18.2% vs 3.0%), that there has been an increase in part time jobs (18.2% higher vs 1.5% lower), leading to a big increase in outsourcing and most importantly, Obamacare costs are being largely passed on to customers (28.8% reporting higher vs 0.0% lower), the punchline was that while there is basically no change in the number of employees covered (17.6% higher vs 14.7% lower and 67.6% unchanged), there has been a big jump in Premiums, Deductibles, Out-of-pocket maximums, and Copays, which has been “matched” by a far greater reduction in the range of medical coverage and the size of the network.
In short a disaster.
And what’s worse, this sentiment will persist long after the current subprime auto loan-driven manufacturing renaissance is long forgotten.
If it’s the law, how can Obama keep changing, delaying, modifying, and ignoring it?
If Obamacare is so great why don’t the Democrats embrace it and run their November campaigns around this superlative feather in all their caps?
Are you still waiting for your $2,500 annual savings?
Submitted by Tyler Durden on 07/20/2014 21:52 -0400
As WSJ reports, last week’s geopolitical chaos and distraction was ideal for a news dump, and the White House didn’t disappoint: On no legal basis, all 4.5 million residents of the five U.S. territories were quietly released from ObamaCare. It seems the costs of healthcare soared in these five territories due to uneconomic mandates – which woul dhave been a disaster PR-wise for the administration and so, under cover of catastrophe, WSJ reports all of a sudden last week HHS discovered new powers after “a careful review of this situation and the relevant statutory language,” that enabled them to ‘selectively exempt’ American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands from Obamacare. And all while vacationing…
As WSJ reports,
The original House and Senate bills that became the Affordable Care Act included funding for insurance exchanges in these territories, as President Obama promised when as a Senator he campaigned in Puerto Rico, the Virgin Islands and other 2008 Democratic primaries. But the $14.5 billion in subsidies for the territories were dumped in 2010 as ballast when Democrats needed to claim the law reduced the deficit.
As a consolation, Democrats opened several public-health programs to the territories and bestowed most of ObamaCare’s insurance regulations, which liberals euphemize as “consumer protections,” such as requiring insurers to accept all comers and charge the same premiums regardless of patient health.
However, costs soared as no insurer would touch them…
These uneconomic mandates promptly caused insurance rates to soar and many insurers to flee the territorial markets. You can’t buy any policy at any price in the Mariana Islands. So the territories have spent the last two years beseeching HHS for a regulatory exemption.
So time to change the rules… from this…
As recently as last year, HHS instructed the territories that they “have enjoyed the benefits of the applicable consumer protections” and HHS “has no legal authority to exclude the territories” from ObamaCare.
To this…
Laws are made by Congress, but all of a sudden last week HHS discovered new powers after “a careful review of this situation and the relevant statutory language.”
American Samoa, Guam, Puerto Rico, Northern Mariana Islands, and Virgin Islands.
* * *
Which leaves only one question… where does everybody else apply for their ‘uneconomic’ exemption?
Obama just keeps breaking records for ineptitude and creating despair. The charts below detail the huge success of his economic policies. I think even liberal morons would agree that men between the ages of 25 and 54 years old SHOULD be working. College is behind you and it is time to earn money, raise a family, save for your retirement, and become a productive part of society. When the Obama recovery began in the middle of 2009, 10% of all men between the ages of 25 and 54 were not in the labor force. That was already an outrageously high number.
Now, after 5 years of “economic recovery” spurred by massive Keynesian debt spending, zero interest rates, government handouts to Wall Street, and the introduction of free healthcare for all, 12% of all men between the ages of 25 and 54 are not in the labor force. Now that’s real progress. I bet Obama can get that figure to 14% before he leaves office with accolades from the liberal media pundits. Who needs working men anyway?
The fact that 17% of all men between the ages of 25 and 54 are not working is a shocking enough figure, but even the politically correct conservatives refuse to go one step further and examine the BLS data regarding the racial breakdown of working men. Obama is supposedly the champion of the poor and minorities. He won over 90% of the black vote in the last election. It seems that 30% of all black men between the ages of 25 and 54 years old are not working. And this doesn’t even count the black men in prison in this age bracket.
You get more of what you encourage and promote. Why are there twice as many black men as white men not working during their prime employment years? Because they don’t have to. They can live off of the working population through food stamps, Section 8 subsidies, SS disability, and the myriad of other welfare programs supported by Obama and his liberal control freak minions. Everything Obama does is a detriment to creating jobs. Every Keynesian waste of tax payer dollars has kept the market from truly recovering. Every new regulation to save the earth deters companies from hiring workers.
The rollout of his disastrous Obamacare abortion has already resulted in layoffs, small business closings, and reduced hiring by all businesses. And the worst aspects of this law haven’t even been implemented. His brilliant idea to raise the minimum wage to $10.10 would provide a real boost to the number of 25 to 54 year old men not working. He’s the gift that keeps on giving.
The consequences of men in their prime earning years not working are far reaching and dire. This puts a halt to family formation, home buying, car buying, contributions to the Social Security system, income taxes needed to pay for all that government waste, and the mental stability of men who feel worthless without a job. Throw in the massive build-up of student loan debt among young men and you have a powder-keg ready to blow. The upcoming financial crisis will be the trigger to unleash a hailstorm of anger, violence and rage. It’s uncertain who this will be unleashed upon. Hopefully, the ire is focused where it belongs on Obama and the government. The war has just begun.
“There are currently 61.1 million American men in their prime working years, age 25–54. A staggering 1 in 8 such men are not in the labor force at all, meaning they are neither working nor looking for work. This is an all-time high dating back to when records were first kept in 1955. An additional 2.9 million men are in the labor force but not employed (i.e., they would work if they could find a job). A total of 10.2 million individuals in this cohort, therefore, are not holding jobs in the U.S. economy today. There are also nearly 3 million more men in this age group not working today than there were before the recession began,” the Republicans on the Senate Budget Committee claim…
Although defenders of the current economy attribute shrinking labor force participation to the increasing pace of retirement of the Baby Boomer generation, these new statistics above confirm a trend that Barron’s recently diagnosed: ‘The ratio of those over 55 in the workforce actually ticked up’—in other words, older Americans are being forced to return to work in a poor economy to make ends meet while many younger Americans simply aren’t working at all. In short, there is an unprecedented supply of working-age Americans who do not hold jobs.” – Daniel Halper
Another Obama success story. Have the government take over the entire student loan industry in one fell swoop. Utilize the program as a way to artificially reduce the unemployment rate and to provide Keynesian stimulus to the economy as the “student” borrowers don’t actually go to class, but spend the borrowed money on iGadgets, Xboxes, and nights out at Applebees. Dole out $400 billion in NEW student loan debt in the last four years, bringing the total outstanding to $1.23 billion. This was all done with taxpayer money. When you realize the functional illiterates who got the loans will never be able to pay them back, you start reducing the interest rates, reducing monthly payments and create a brand new loan forgiveness program. Loan forgiveness is a clever name for FUCK THE TAXPAYER.
You then make ridiculous assumptions about the number of participants and the loan amounts to make it seem like a perfectly reasonable government program. Tell the dykes on MSNBC to rave about the wonderful plan and tell them it’s for the chilrun. Then you hire a bunch of unemployed liberal douchebags to market the plan to dumbass students getting degrees in African history and Mural art appreciation. Then you send emails to every indebted student in the country encouraging them to default on their student loans. And guess what? Huge success. Millions of students with no brains or hope for a job are stampeding into this wonderful program.
You the taxpayer are fucked at the rate of $72 billion so far. Obama’s brilliant strategy in controlling the student loan market will now cost you $14 billion per year in loan losses. And this is just the beginning. The losses will run into the hundreds of billions. It’s called math – something these students and Barack Obama have failed miserably.
Who could have predicted this result? Oh yeah, me – The Subprime Final Solution
Do you think Obama’s cost estimates for Obamacare will be this good? I can’t wait to find out.
“Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone,” is a study’s warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports, enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion. The administration is looking to cap debt eligible for forgiveness, as President Obama’s revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The ‘popularity’ of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions.
We have been aggresively focused on the government’s blowing of the student loan bubble…
Student debt has nearly doubled since 2007 to $1.1 trillion, disproportionately driven by the growth in graduate-school debt.
And questioned the need to incur such massive credit-fueled costs of tuition only to gain a low-paying job…
there is no point in trying to preserve the old regime. Today’s emphasis on measuring college education in terms of future earnings and employability may strike some as philistine, but most students have little choice. When you could pay your way through college by waiting tables, the idea that you should “study what interests you” was more viable than it is today, when the cost of a four-year degree often runs to six figures. For an 18-year-old, investing such a sum in an education without a payoff makes no more sense than buying a Ferrari on credit.
And while government plans are nothing new, Obama has aggressively promoted them…
The government has offered some form of income-based repayment since the early 1990s, but few studentsfound the terms enticing. But in 2007, Congress allowed borrowers working in nonprofit and government jobs to have unpaid debt forgiven after 10 years, and cut monthly payments for new borrowers to 15% of discretionary income.
In 2010, it cut those payments to 10% for borrowers who took out loans from 2014. A year later, Mr. Obama, through executive action, moved up the date when borrowers could qualify for the new terms, creating a program for those who took out loans from 2011. The White House this year has proposed making the program available to all student borrowers, regardless of when they signed their loans.
The popularity of the programs surged after the Obama administration began to promote them, starting in 2012, on the Internet and later through email to borrowers.
And it seems they are ripe for abuse…
“Income-based repayment can be a way for students responsibly to manage debt, but it should not be a bailout for students who borrow too much or for schools who charge too much,” said Sen. Lamar Alexander of Tennessee, the ranking Republican on the Senate Education Committee.
But, as usual, the government screwed up…
The plans’ long-term costs have greatly outpaced the government’s predictions. In the last fiscal year, debt absorbed by the repayment plans from the most widely used student-loan program—Stafford loans—exceeded government expectations from a year earlier by 90%.
…
A report Monday last week from the Brookings Institution, a centrist think tank, offered one of the few preliminary examinations of the programs’ impact. The most popular plan could cost taxpayers $14 billion a year if it becomes available to all borrowers as Mr. Obama has proposed, while fueling tuition inflation, it said.
“Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone,” the study said. The authors recommend scrapping the forgiveness provisions.
Sure enough everyone piled in looking for their handout…
Enrollment in the plans—which allow students to rack up big debts and then forgive the unpaid balance after a set period—has surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion, U.S. Education Department records show.
Which means costs are soaring and the administration feels the need to do something to fix what it had broken by intervening once again…
The Obama administration has proposed in its latest budget released last month to cap debt eligible for forgiveness at $57,500 per student. There is currently no limit on such debt.
The move reflects concerns in the administration not just about the hit to the government, but over the risk that promising huge debt forgiveness could make borrowers and schools less disciplined about costs. Colleges might charge more than they would otherwise, leading students to borrow more.
And so is the government about to pop the student loan bubble by spoiling a good thing – unlimited debt forgiveness – for students and trickling down that credit tightening impact on colleges only to happy to raise tuition costs to reflect the credit-forgiveness-adjusted amount of money on the table?
OUCH. YOU’RE GOING TO NEED A DOCTOR TO CURE OBAMACARE DISEASE. BUT IF YOU HAVE THE SILVER PLAN GET READY TO PAY
You know we are near or at a market top when shit stains like Ally Financial are brought public by fellow shit stains – Citi, Goldman, and Morgan Stanley. You’d have to be brain dead or an Ivy League trained economist to buy this turd sandwich at $25 per share. You’d have to be retarded shit eating muppet to buy this worthless government manipulated joke of a company. This is the company that has been doling out billions in subprime auto loans to the Free Shit Army for the last three years in order to prop up General Motors auto sales. They have been doing this because Obama and his minions instructed them to do so. Now that they are loaded with hundreds of billions in loans that will never be repaid, Obama is dumping this piece of shit on the public market where the Wall Street shysters will try to convince you to buy it. Jim Cramer thinks it’s the bomb.
I decided to go to their last SEC filing to get the real scoop about this joke. Here is the link:
http://www.ally.com/about/investor/earnings-releases/
Here are my pithy observations:
What do you think is going to happen when the $54 billion of subprime auto loans they’ve doled out over the last four years start to really go south? What do you think will happen as interest rates on their debt ratchet upwards? If they are already losing almost a billion per year, the future will be epic.
They originally filed to go public in March 2011. I wonder what took so long. I guess they wanted to get their loss under $1 billion before allowing the masses to buy into their success story.
But I’m probably wrong. Facts don’t matter. This is a fantastic investment opportunity for the muppets. Step right up and buy some Ally Financial. You bailed them out once, why not do it again?
Ally Financial Inc. (ALLY) priced its initial public offering at $25 a share after markets closed on Wednesday. The IPO price was at the low end of the expected range. The company sold 95 million shares Thursday morning for gross proceeds of $2.38 billion.
The low-end pricing of the stock is just another poke in the eye to U.S. taxpayers. All the proceeds will be used to pay back the U.S. Treasury’s $17 billion bailout of the company known as GMAC back in 2008 when the financial crisis hit. Thursday’s sale reduces the federal government stake in the company from about 38% to around 14%.
Underwriters are Citigroup, Goldman Sachs, Morgan Stanley and Barclays Capital, which have an overallotment option on an additional 14.25 million shares.
One analyst at BTIG has already put a Buy recommendation on the bank’s stock with a price target of $31 a share, according to a report at TheStreet.com. That is arguable given that Ally failed its most recent Federal Reserve stress test and has set up a subsidiary on which the bank intends to shed all its bad loans.
Ally also has about $79 billion in remaining debt that the bank has to roll over constantly as the principal payments come due. From Ally’s point of view, if interest rates never rise about 0.25%, it is all right with the bank.
Shares opened down 3% at $24.25 and have since picked up slightly to $24.57.
