Another Conspiracy Theory Becomes Fact: The Fed's "Stealth Bailout" Of Foreign Banks Goes Mainstream | Zero Hedge

Another Conspiracy Theory Becomes Fact: The Fed's "Stealth Bailout" Of Foreign Banks Goes Mainstream | Zero Hedge: "Back in June 2011, Zero Hedge first posted:

"Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went"
which we followed up on various occasions, most notably with

"How The Fed's Latest QE Is Just Another European Bailout" and
"The Fed's Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month.""



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Largest Public Pensions Face $2 Trillion Hole, Moody’s Says - Bloomberg

Largest Public Pensions Face $2 Trillion Hole, Moody’s Says - Bloomberg: "The 25 biggest systems by assets averaged a 7.45 percent return from 2004 to 2013, close to the expected 7.65 percent rate, Moody’s said in a report released today. Yet the New York-based credit rater’s calculation of liabilities tripled in the eight years through 2012, according to the report."





So I wonder what will happen once the Fed enhanced returns are no more ..... if they returned 7.45% while this was happening



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BestBuy issues $1.5Billion in unsecured debt in Q1 and uses $1Billion of it to buy back their own shares - CapEx unchanged to lower

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All joking aside, here's what happened: in Q1 BBBY issued $1.5 billion in Senior Unsecured Notes, and promptly used $1 billion of this to buyback its own shares. Because this time the credit bubble is different.

Thank you Bernanke.

Just 3 WTF Earnings Charts | Zero Hedge

Just 3 WTF Earnings Charts | Zero Hedge: "Chapter 2: Top-Down Hockey Sticks

Despite these chronic historical downward-revisions, Forward S&P 500 EPS estimates continue to surge (driven by large market cap effects and the hockey-stick hopes and dreams)"







Net earnings revisions have been positive only 12 times in the last 104 weeks...







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The Scotland Referendum: Who Voted How And Why? | Zero Hedge

The Scotland Referendum: Who Voted How And Why? | Zero Hedge: "he following post-referendum poll from Lord Ashcroft does a good summary of who voted how and why. However, the most telling distinction is the following:



Voters aged 16-17: YES: 71%; NO: 29%



Voters aged 65+:    YES: 27%; NO: 73% 



How will last night's vote look like in 5, 10 or 15 years when today's 17 year olds are Scotland's prime demographic?"



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Scotland, Scottish Independence, Scotland vote

Missing Men in U.S. Workforce Risk Permanent Separation - Bloomberg

Missing Men in U.S. Workforce Risk Permanent Separation - Bloomberg: "The pace of decline was among the fastest during the last two contractions and the drop has continued in the current expansion, according to data compiled by Bloomberg from Labor Department reports. This shows the labor-market recovery isn’t strong enough for some men to find jobs or even continue looking.

"



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Why Scotland Has All The Leverage, In One Chart | Zero Hedge

Why Scotland Has All The Leverage, In One Chart | Zero Hedge: "And yet, as always, the bottom line is about leverage and bargaining power. It is here that, miraculously, things once again devolve back to, drumroll, oil, and the fact that an independent Scotland would keep 90% of the oil revenues! As we showed several days ago, Scotland's oil may be the single biggest wildcard in the entire Independence movement.

It is this oil, and its interconnectedness within the UK economy, that as SocGen's Albert Edwards shows earlier this morning, is what gives Scotland all the leverage."



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Also-

The New York Times reports:

Scottish nationalists have long argued that being governed from London has deprived their country of its fair share of the wealth from Britain’s oil and natural gas fields, which mostly lie in North Sea waters off their shores.

“It’s Scotland’s oil” was the rallying cry in the 1970s that helped raise the profile of the Scottish Nationalist Party, which now leads the country and is pushing for a vote to secede in the referendum on Thursday. Alex Salmond, the politician leading the separatist movement, has pointed to North Sea energy as the treasure that would help finance an independent Scotland — ensuring that the country could continue the generous public spending, including free university tuition, that he is promising voters.

Al Jazeera notes:

Massive oil reserves in the North Sea are at the heart of the Scottish independence debate. Many are questioning whether the reserves are just for Scotland or if the rest of the United Kingodm should continue to benefit from their profits.

NBC writes:

The ‘Yes’ campaign … says Scots should have total control of their own affairs and that revenue from Scotland’s offshore oil fields would sustain the country’s economy.

In addition, as Max Keiser explained:

(1) The UK can now borrow cheaply using the giant Scottish oil reserves as collateral

(2) If Scotland leaves, the collateral (oil reserves) is no longer available

(3) So the cost of borrowing money for Britain skyrockets

SCOTTISH INDEPENDENCE, SCOTLAND, NORTH SEA OIL

BBC News - Economy tracker: Unemployment

BBC News - Economy tracker: Unemployment:



"Understanding unemployment:
A person is classed as unemployed if not only out of work, but also actively looking for work and available to start work within a fortnight"



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UK UNEMPLOYMENT, UNEMPLOYMENT CALCULATION, UNEMPLOYMENT RISING SINCE 2005

Unemployment Rate Set To Plunge As Bill To Restore Jobless Benefits Fails To Pass Senate | Zero Hedge

Unemployment Rate Set To Plunge As Bill To Restore Jobless Benefits Fails To Pass Senate | Zero Hedge: "Whatever the answer, it increasingly seems that no law, retroactive or otherwise, will pass before the end of the month, which also means that up to (a record) 1.4 million Americans will fall out of the labor force, in addition to the now traditional 200K-600K people who quietly exit the labor pool every month. Which also means that, as we explained previously, since the impact on the unemployment rate could be as high as 0.8% from just the EUC expiration alone, that the unemployment rate for January could crash to under 6% just as the economy is starting to really backslide, as shown by the recent horrendous data from retailers across the board."



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UNEMPLOYMENT , COMPONENTS OF UNEMPLOYMENT

Kohl's And The Rest Of The Retailers Are In Deep Trouble | Zero Hedge

Kohl's And The Rest Of The Retailers Are In Deep Trouble | Zero Hedge:

I didn’t get a chance to peruse the commerce department drivel until this morning. They put out unadjusted data and adjusted data. Shockingly, the adjusted data is always rosier than the unadjusted data. I wonder why? I can understand the rationale for adjusting month to month data due to holidays and calendar events. But I still don’t trust the adjustments. There should not be a major difference when comparing year over year data. The adjusted data should reflect the same relationship to the unadjusted data on a year over year basis. Well guess what? It appears our friendly government drones may be pumping the current data to give the appearance of recovery. Here are my observations after taking a look at the government propaganda report:

• The unadjusted retail sales were only 3.2% higher than last August. Considering government reported inflation of 2%, that is a pretty shitty result. But have no fear. The “ADJUSTED” retail sales for August were 5.0% higher than last August. WTF? Guess which number gets reported to the sheep?
• Hysterically, your government drones consider lending deadbeats $40,000 for seven years with no money down to drive away with a GM deathtrap SUV as a retail sale. The billions in subprime auto loans led to an 8.8% YoY surge in “ADJUSTED” auto sales. It seems the unadjusted number only went up 5.3%.
• When you back out the Federal Reserve/Wall Street pumped auto sales, which will ultimately result in billions of written off bad debt (you’ll pick up the tab), unadjusted retail sales were only 2.7% higher than last August. With real inflation of 5% or more, real retail sales are negative on a year over year basis.
• Despite financing deals of 4 years with no interest, furniture and electronics retail sales were flat versus last August. If there really is a housing recovery and 2.1 million more Americans are employed versus last August how could these discretionary sales be flat, and negative on an inflation adjusted basis?
• Grocery store sales were up only 2.1% over last year. Even the government is reporting 2.7% food inflation in the last year. We all know it is closer to 10%, so people are actually reducing the amount of food they are buying. That is a sure sign of an economic recovery.
• Clothing store sales were flat and department store sales were negative versus last August. So much for the back to school storyline. I do believe August is back to school time. The Sears and JC Penney Bataan Death March trudges toward bankruptcy.
• What did surge was sales at restaurants and bars. They soared by 6.8% versus last August. We already know Darden, Yum Brands and McDonalds have reported dreadful results, so either the government is lying, soaring food prices are being passed on to customers, or people are so depressed by this awesome economic recovery they are drinking themselves into a stupor.

As a side note on the accuracy of this government data, in a previous role at IKEA, when I was a much younger man, I was responsible for filling out the monthly government retail surveys for the Census Bureau. The government drones collecting this data do not check it. They do not require proof that it is right. It is self reported by retailers across the country. Filling out this crap for the government was about as low on my priority list as whale shit. If I was really busy, I’d make the numbers up, scribble them on the form and put it in the mail. The numbers the government are accumulating are crap. And then they massage the crap. And then they publish the crap as if it means something. It’s nothing but crap.

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Australians Face Repayment Shock on High-Risk Mortgages - Bloomberg

Australians Face Repayment Shock on High-Risk Mortgages - Bloomberg:





Driving the growth is demand for high-risk mortgages such as interest-only loans and financing to buy rental properties. 



Interest-only mortgages jumped to 43 percent of all new home lending in the three months through June 30, and credit to buy rental properties climbed to 38 percent, both record highs



Even as the jobless rate reached a 12-year high of 6.4 percent in July, RBA Governor Glenn Stevens has refrained from further rate cuts. The unemployment rate fell to 6.1 percent in August, drawing skepticism from economists at NAB, ANZ and Morgan Stanley who expect the number of jobs added to be revised downward.



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Why US Interest Rates Can Never Rise (In 1 Chilling CBO Chart) | Zero Hedge

Why US Interest Rates Can Never Rise (In 1 Chilling CBO Chart) | Zero Hedge: "Why US Interest Rates Can Never Rise"

To summarize:

The U.S. gross federal debt currently stands at $17.548 trillion, and net interest payments to our creditors are the fastest-growing item in the budget. In 2014, the Congressional Budget Office projects that the nation will spend $233 billion on interest payments. By the end of the budget window in 2024, however, CBO forecasts that interest payments will nearly quadruple to an astonishing $880 billion. Every dollar spent paying our creditors is a dollar wasted—money for which we get nothing in return. Interest payments threaten to crowd out every other budget item.

To put the $880 billion, single-year interest payment in perspective, here is what we currently spend on other budget items:

• Federal Courts – $7.4 billion

• Department of Education – $56.7 billion

• Secret Service – $1.8 billion

• Food Inspection – $2.3 billion

• Census Bureau – $1.0 billion

• Border Patrol – $12.3 billion

• National Parks – $3.0 billion

• NASA – $17.6 billion

• Centers for Disease Control – $7.1 billion

• Federal Prison System – $6.9 billion

• Workplace Safety Inspections – $0.9 billion

• Immigration and Customs Enforcement – $5.6 billion

• FDA – $2.6 billion

• Federal Highway Budget – $40.4 billion

• Coast Guard – $10.0 billion

• Small Business Loans – $0.9 billion

• Veterans’ Health Care – $55.3 billion

• FBI – $8.3 billion

Every debt incurred today will be paid off in the future. The graph above may be shocking to some, but it’s only a very small part of the picture. This is just interest on debt, and doesn’t even include the costs of repaying the principal. Of course, the principal never really gets repaid as the government just borrows afresh to paper over its old debts, but the interest must be covered lest savers stop lending money to the government.

Nor is this only a concern for the future. Last year the government spent more on interest payments (c. $700 bn.) than it did on Medicare (a little under $600 bn.).

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Quality Of Jobs Created In August 2014 Deteriorates Again | Zero Hedge

Quality Of Jobs Created In August Deteriorates Again | Zero Hedge: "Of the 142K jobs created, just under half came from the lowest paying jobs possible: education and health; leisure and hospitality; and temp-help. The best paying jobs, finance and information, added a whopping 4K jobs between them. Finally, about that much delayed US manufacturing renaissance: stick a fork in it - in August the number of manufacturing jobs created was exactly 0."



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Why Draghi's ABS "Stimulus" Plan Won't Help Europe's Economy | Zero Hedge

Why Draghi's ABS "Stimulus" Plan Won't Help Europe's Economy | Zero Hedge: "We leave it to Bloomberg to conclude...

The ECB initially plans to target the most senior and least-risky segment of the secured bond market. The central bank would only consider buying lower portions, such as the so-called mezzanine part, if governments provide a guarantee, Draghi said.
 
The ECB needs to buy the junior portions of the securities to have the desired effect, said Robert Wakiyama, who manages the $1.4 billion Credit Suisse Lux Global Securitized Bond Fund (CSSIFAB) from Zurich. That’s because banks and insurance companies that buy the bonds have to hold more capital to insure against losses on the junior portions of the securities.
 
“Buying senior ABS bonds is not the solution in our view as it doesn’t take the risk from the banks’ balance sheet,” Wakiyama said. “With the current regulation, banks have to retain the most junior part. As long as the ECB isn’t participating in those bonds, I don’t see either a capital relief for banks or the banks giving more credit to the real economy.”"



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