The Government Shutdown Game, Whats The Real Agenda? – Episode 179

youtube_shutdown_real_agenda_economic_collapse2

The Government is still shutdown. The Government is making sure the people are feeling the pain. They closed the national parks, shutdown websites and are withholding cancer treatments. While they are doing this they are giving aid to other countries, giving aid to the Syrian militants and giving money to corporation for public broadcasting. There was a shooting in DC and the story is still unfolding. The ECB, FED and Treasury are all now reporting that the longer the shutdown goes the worst the economy is going to be. Israel is teaming up with middle eastern countries to fight against Iran.

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Current News


Economy

Cyprus banks may need further $2 billion of capital: Moody’s

  • NICOSIA (Reuters) - Cypriot banks could need a further 1.5 billion euros ($2 billion) of capital to cope with a rise in bad loans in a rapidly contracting economy, credit rating agency Moody’s Investors Service said on Thursday.
  • Moody’s said the Mediterranean island’s banks and cooperative lenders were likely to need the money on top of the 2.5 billion euros of EU support already earmarked for the banking sector.
  • Cyprus shut one its largest banks and forced depositors to forfeit savings to recapitalize a second bank in March, as part of a 10 billion euro aid package from international lenders after the country was hit by the euro zone debt crisis.
  • Moody’s, which put Cypriot banks on a “negative” outlook in May 2009, said in a report it anticipated a 12 percent contraction in economic output this year, considerably worse than lenders’ estimates of an 8.7 percent decline.
  • The agency estimated that problem loans increased to around 26 percent of gross loans at the end of 2012, and would increase to over 35 percent by the end of this year. It did, however, say there was limited publicly available data on the matter.

Source: money.msn.com

Growth at US service firms slows from 8-year high

  • Growth at U.S. service companies slowed in September from an eight-year high in August, as sales fell sharply, new orders dipped and hiring weakened.
  • The Institute of Supply Management says its service-sector index fell to 54.4 in September, down from 58.6 in August. August’s reading was the highest since December 2005. Any reading above 50 indicates expansion.
  • The report measures growth in service industries, which cover 90 percent of the workforce, including retail, construction, health care and financial services.
  • A measure of sales fell seven points to 55.1, indicating much slower growth. And a gauge of hiring also dropped sharply to 52.7 from 57 in August. New orders also dipped, but remained just below 60, suggesting there is plenty of demand in the pipeline.
  • Still, the sharp drop in sales suggests consumers and businesses pulled back on spending last month. And it comes at a critical time when the government shutdown threatens to weigh on economic growth in the October-December quarter, if it goes beyond a week. Consumer spending drives 70 percent of economic activity.
  • Five industries, including hotels and restaurants, arts and entertainment, and health care reported lower business activity. Twelve reported growth, though report doesn’t specify on the industry level if growth was slower than the previous month
  • The survey’s jump in August was an encouraging sign that growth may be picking up. But other data point to an economy that remains sluggish.
  • Consumers boosted their spending in August only slightly. On Wednesday, private payroll provider ADP said that hiring by service firms dipped in September from the previous month. The ADP figures usually diverge from the government’s more comprehensive employment report.
  • The government’s September employment report was scheduled to be released on Friday. But it will now be delayed because of the government shutdown.
  • The shutdown may depress consumer confidence, particularly if it lasts for more than a week. That could cause Americans to cut back on their spending at service firms such as restaurants, retailers and hotels.
  • Many economists forecast that growth has slowed to an annual rate of 1.5 percent to 2 percent in the July-September quarter, down from a 2.5 percent annual rate in the April-June quarter.
  • Growth may rebound to an annual rate of 2.5 percent to 3 percent in the current October-December quarter. But that forecast were made before this week’s impasse that shuttered the government. The shutdown could shave about 0.15 percentage points from the fourth quarter figure for each week it lasts.

Source: cnsnews.com

Reuters to cut 5% of editorial staff

  • British news agency Reuters is cutting 5 percent of its editorial staff, it has been revealed.
  • According to reports, president and editor-in-chief of the news agency Stephen Adler told staff earlier on Wednesday that Reuters plans to cut its newsroom employees with notices to go out this month.
  • Layoffs will be “starting quickly and will move as fast as it can,” Adler was quoted as saying.
  • “To simplify and strengthen the Reuters news operation, we are making changes that will result in a slightly smaller editorial staff,” Adler said according to a statement by Parent company Thomson Reuters spokesperson.
  • He said the reductions aim at helping Reuters to deliver the news which matters the most to customers and the whole society.
  • Thomson Reuters, which is one of the world’s biggest news agencies, has more than 60,000 employees. The cuts, due to be implemented next month, could result in hundreds of job losses.
  • The company has already announced 2500 layoffs since the beginning of the year.

Those talking about the recovery are laying off workers.

Source: presstv.ir

Meet The Monster Of The Housing Market: Presenting “Vampire REOs” Where Half Of Americans Live Mortgage-Free

  • Over a year ago, in addition to the money-laundering aspect (confirmed previously) and the REO-To-Rent scramble by PE firms and hedge funds (which is now over as PE becomeactive sellers of apartment rental properties), we highlighted the third implicit subsidy to the housing non-recovery: Foreclosure stuffing. We explained this scheme by banks to limit the amount of available for sale inventory as follows: “since the properties not entering the foreclosure pipeline are effectively kept out of inventory, even shadow inventory, and thus the distressed end market, the monthly drop in foreclosures has acted as a form of subsidy to the housing market, as month after month less inventory than otherwise should, enters the market.… What this has resulted in is a logical increase in prices of the properties that are on the market.” Today, the mainstream has finally caught on, and courtesy of RealtyTrac has come up with its own name for this subsidy: Vampire REOs.
  • In a press release overnight, the foreclosure tracking service RealtyTrac, observed that a stunning 47% of bank-owned homes are still occupied by their previous owners who were foreclosed on, creating “vampire REOs.
  • Vampire REOs are bank-owned homes that are still occupied by the previous homeowner who was foreclosed on. On the surface these properties often will look like normal, non-distressed homes, but beneath the surface they represent a shadow inventory that is becoming more imminent as rising home prices motivate banks to sell off these homes to try to recoup their losses on soured loans.
  • The vampires are particularly acute in Miami (64%), Houston (65%), Los Angeles (61%)which have nearly two thirds of bank-owned properties falling into the “vampire REO” category. This means that in order to generate a housing scarcity, millions of deadbeat Americans have been given a carte blanche to live mortgage-free, in some cases for years, and in a state of default in their existing homes, as the banks have no incentive to actually clear out the properties to which they have title, making home purchases for everyone else – those who have the funds and are willing to purchase a home – impossible due to artificially los supply and artificially high prices.
  • Putting the problem in perspective, Emmett Laffey, CEO of Laffey Fine Homes International said that “The New York metro area is experiencing a spike in mortgage defaults, however, there are very few vacant foreclosures or bank-owned properties that are languishing on the market.” “Typically these types of properties are sold well within 30 days of hitting the market,” he added. Except when they never make the market.
  • Of course, now that home prices have been artificially boosted courtesy of just this foreclosure process “stuffing”, “banks likely wish to sell these homes sooner rather than later as home prices have been rising” predicts RealtyTrac.
  • However, therein lies the dilemma: since the primary driver of home price appreciation has been fake scarcity, either due to Vampire REOs or Zombie foreclosures (the far more traditional homes that are still languishing in the foreclosure process but have been vacated by the homeowner being foreclosed), the second that banks unclog the foreclosure pipeline exit and begin selling this uber-shadow inventory, the entire facade of the fake housing non-recovery will begin to crumble as one after another bank scramble to hit the highest bid possible, before some other bank does so.
  • Expect the broader mainstream media to begin reporting on this phenomenon in another 6-8 weeks, about the time when the Y/Y increase in home prices is solidly rolling over, and the usual 18 months delay behind Zero Hedge.
  • Finally, those curious to see how many foreclosed homes are being occupied mortgage free in their metro area, the following interactive chart from RealtyTrac has the answer.

Source: zerohedge.com

Bill Gross’ Advice On Why You Should “Run For The Hills

  • PIMCO        ✔ @PIMCO
  • Gross: Don’t run for the hills b/c of the #shutdown or the debt ceiling – Run b/c the economy is slowing by itself.
  • And of course buy some 5 Year bonds while you are running preferably.

Source: zerohedge.com


Rights

Need health care coverage? Just dial 1-800-F**KYO to reach Obamacare’s national hotline

  • Need health insurance? The Obama administration has you covered. Simply dial 1-800-FUCKYO to reach the next available health-care provider.
  • Far from being a mistype, that’s the official number that Health and Human Services wants Americans to dial when seeking health care. Obamacare’s national call center really did list its number as 1-800-318-2596, helpfully spelling out President Barack Obama’s tendency to blatantly flip the bird in plain view.
  • After allowing for the lack of letters attached to 1 on a traditional American telephone keypad, the number spells out a clear message. For every duped voter, every young invincible weighing the cost of a penalty versus a newly tripled yearly deductible, every ailing old granny in a wheelchair (whom, remember, Paul Ryan wants to push off a cliff) who needs adequate and affordable health care, Obama’s message is:

Source: dailycaller.com

 

California Admits Obamacare Interest Was Inflated By Almost 8 Times

It seems many people are going to look around and see what the prices are, once they see the prices of the insurance many just leave the site. It has been reported that less than 1% actually signed up.  People are starting to realize that Obamacare is nothing more than what we had before but worse, now you are forced to take it, now you have to pay higher prices, now there is no competition among health insurance carriers, now companies are not giving benefits, now you are penalized if you don’t take it. So who benefits from this? Not the people

  • Remember all those headlines about the “milions” of people swamping the new Obamacare exchange sites and how that explained why the “glitches” appeared and how this proves the American people are so desparate for the insurance… well, the truth appears to be leaking out. As Politico reports, California’s health insurance exchange reported – wrongly – that it had received 5 million hits on its website the first day of Obamacare. State officials said the real number was only about a tenth of that, or 645,000. Is it any wonder that fewer Americans trust other Americans than ever before?
  • Via Politico,
  • Dana Howard, a spokesman for Covered California, as the state exchange is known, said internal miscommunication about the numbers caused the error. “Someone misspoke and thought it was indeed 5 million hits. That was incorrect,” the paper quoted him as saying.
  • California has an ambitious goal of signing up about 2 million people for Obamacare – a big chunk of the seven million the White House wants to get covered in the health insurance exchanges the first year.
  • Like most states, California’s exchange had a rough first day, with computer problems and temporary halts to enrollment and online insurance shopping. Officials had cited the high volume e- the 5 million – as a reason the $313-million online system was so troubled. Glitches and delays persisted on Wednesday.
  • Federal officials have also been blaming higher than anticipated traffic for the snarls of the website of the federally-operated exchanges serving three dozen states.

Source: zerohedge.com

EXCLUSIVE: Less than 1% of visitors are signing up for Obamacare on state health exchange websites

  • California’s program registered an estimated 0.58 per cent of website visitors in its first day
  • A Connecticut congressman boasted that his state took 167 applications for Obamacare services on day one, a rate of 0.59 per cent
  • Obama administration won’t say how many Americans signed up on the central website that covered insurance exchanges for 36 states
  • Kentucky’s 5.3 per cent application rate seems to be the nation’s highest
  • Other states wouldn’t provide statistics, or tracked only the creation of new online accounts, not numbers of completed applications
  • As President Obama’s signature health insurance overhaul effort began to enroll new participants on Monday, some states running their own insurance exchanges saw huge levels of website traffic but paltry interest in signing up.
  • California, the ultimate blue state whose federal lawmakers voted overwhelmingly in support of Obamacare, turned less than 1 per cent of its Web visits into ‘Covered California’ participants on Tuesday.
  • ‘We had over 5.7 million hits to our website as of 3 p.m. yesterday,’ Covered California spokeswoman Kelsey Caldwell told MailOnline Wednsday.
  • ’7,700 consumers began their application process yesterday. … 4,143 applications are pending,’ she added. ‘We received 23,269 calls yesterday to our service center.’
  • Caldwell couldn’t say how many of the 5.7 million website hits were from unique Californians. But assuming 712,500 online visitors saw eight different Web pages each, the sign-up rate was 0.58 per cent
  • Connecticut saw a similarly low rate of interest. Democratic Congressman Jim Himes tweeted after 8:30 p.m. Monday that his state’s health exchange had ‘received 28k visitors, and took 167 applications for health insurance. Day 1.’
  • That indicates just 0.59 per cent of Connecticut residents who sought information about their state’s Obamacare program on Monday decided to become part of it, according to Access Health CT spokeswoman Kathleen Tallarita
  • New York Department of Health executive director Donna Frescato said in a statement that ‘more than 12,000 business owners and individuals from across the state have shopped online for low-cost health insurance plans … and the site has received nearly 30 million web visits.’
  • Los Angeles mayor Eric Garcetti urged Californians to enroll in health care insurance through the Covered California program, but his pleas may be falling on deaf ears
  • A spokesman didn’t respond to a request for clarification about whether those 12,000 people completed applications for health coverage. If they did, and if each ‘web visit’ corresponded to a New Yorker who saw 8 pages, the state’s enrollment rate would be the lowest of all – 0.32 per cent.
  • The low numbers of new enrollees stand in stark contrast to the robust website traffic statistics, suggesting that day-one anxieties about non-functioning online portals may have been overblown.
  • Only 14 states have opted to run their own health insurance exchanges. The U.S. Department of Health and Human Services is handling signup duties for the other 36 states and the District of Columbia.
  • ‘Starting today,’ President Obama said Tuesday during a White House Rose Garden event, ‘you and your friends and your family and your coworkers can get covered, too. Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon.’
  • But his administration isn’t saying how many Americans signed up online so far.

Source: dailymail.co.uk

First Obamacare Data Leak Reported and the System Isn’t Even Live Yet

  • The sanctity of medical privacy and doctor-patient privilege is a thing of the past with Obamacare.
  • The insurance exchange database hasn’t even gone live yet, and there has been a security breach that left the personal information of 2400 people exposed.
  • An employee of Minnesota’s Obamacare exchange, MNsure, sent an unencrypted file to the wrong person and left 2,400 people’s private information at the mercy of a nearby insurance agent.

Source: activistpost.com

 


Police State

Idaho Police Join Growing Number Of Departments With Military Vehicles

  • Several police departments across Idaho have joined the growing number of states receiving armored military vehicles from the federal government.
  • Canyon County, Ada County, Post Falls and Preston are among the departments now equipped with bulletproof, Mine Resistance Ambush Protected Personnel Carrier (MRAP) vehicles, normally seen on the battlefields of Afghanistan and Iraq.
  • “Potentially there are a lot of uses for this vehicle from deflecting an explosive device to containing or approaching an armed subject without use of greater force. We’re working with Boise Fire and other emergency response agencies throughout the Boise area to see what value this vehicle can bring to public safety. We very much appreciate the federal government for providing this vehicle to our city,” Boise Deputy Chief William Bones said
  • Boise’s Department of Defense provided MRAP comes equipped with several components including a “weapons of mass destruction” detection system, something Bones felt was necessary.
  • “This vehicle will be strategic and potentially life-saving for officer response to any incident involving a possible weapon of mass destruction, explosive device, heavily armed subject, even a hazardous material situation.”
  • Preston Police Chief Ken Geddes informed local residents of his department’s acquisition last week, saying the vehicles are essenital to increasing “domestic security” around the country.
  • “Our department has officers that have been trained and have personally used these armored vehicles in real world operations overseas. They feel this vehicle will be an asset in our area just as it was in combat situations,” Geddes said. “I appreciate our government and our military for the security they give us and for their help to increase our strength here in our schools and at home.”
  • Other states including Texas and Tennessee recently received military vehicles as well, courtesy of the Department of Defense surplus program that has flooded the country with military hardware. Incredibly, even the Ohio State University campus police obtained an MRAP last month, becoming the first agency in the state to own such a vehicle.
  • While departments across the country attempt to quell the public’s distrust of militarized police forces, citizens’ fears were yet again justified when internal New Hampshire police documents revealed that the Concord police requested a military vehicle for libertarians and occupiers. Despite having no history of violence, Concord’s Police Chief claimed that the peaceful activist groups were likely to carry out acts of domestic terrorism. The documents caused an immediate backlash, leading a former Marine Corps Colonel to confront officials at a city council meeting, asking why police now wear what the military wore while stationed in Fallujah.
  • Unfortunately, the Concord Police Chief’s irrational comments aren’t surprising given the federal government’s terrorist classification guidelines. Simply loving liberty, being a veteran, owning gold and even protesting is considered suspicious terrorist activity. While police militarize and train to take on Ron Paul supporters, the federal government now openly trains, arms and funds Al Qaeda insurgents in Syria

Source: storyleak.com

 


War

Netanyahu says Iranian missiles could eventually reach U.S.

  • In his latest warning about Iran’s nuclear ambitions, Israeli Prime Minister Benjamin Netanyahu said on Thursday that Iran was working on intercontinental ballistic missiles that could one day hit the United States.
  • “They’re not developing those ICBMs for us. They can reach us with what they have. It’s for you,” he told CBS News.
  • “The American intelligence knows as well as we do that Iran is developing ICBMs not to reachIsrael. They want to reach well beyond,” he said on the network’s “This Morning” program.
  • The United States and other Western powers have shown an increased interest in engaging with Iran’s new president, Hassan Rouhani, although Secretary of State John Kerry said on Thursday that Tehran must first prove it is willing to end the stand-off over its nuclear program.
  • The ICBM issue first emerged after a 2011 blast at an Iranian military base that Israeli officials said was linked to efforts to build a missile that could travel 6,000 miles – far enough to reach the United States.
  • Israeli officials in early 2012 said that it would be two to three years before Iran would have such long-range missiles that could hit the United States.
  • One senior Israeli security official, asked about Netanyahu’s comments Thursday, said the threat of Iranian ICBMs was still not imminent. “It will be a few years before Iran has ballistic missiles,” said the official, who declined to be identified.
  • Netanyahu told CBS that he was not worried that his warnings may sound too strident given the ongoing efforts by the United States and others to negotiate with Iran.
  • “The policy should be … not to let Iran wiggle away with a partial deal in which they make cosmetic concessions,” he said.
  • In another interview, Netanyahu also warned Iran’s work on ICBMs was clearly aimed at delivering nuclear weapons.
  • “Those … long-range ballistic missiles have only one purpose in the world. Their sole purpose is to arm them with a nuclear payload,” he told NBC’s Andrea Mitchell in an interview set to air later on Thursday.

Source: reuters.com

 Israel eyes anti-Iran security pact with gulf states

  • Israel, alarmed at the prospect of a U.S.-Iranian rapprochement, is reported to be discussing the possibility of an anti-Iran alliance with longtime Arab adversaries like Saudi Arabia and the United Arab Emirates, a project that could have immense ramifications in the Middle East.
  • If talks are under way, they’re in large part the result of many secret meetings between Israeli and Arab intelligence chiefs and other senior officials that have been held over several years, often in the Jordanian capital Amman.

Source: stratrisks.com

Training Al-Qaeda To Be More Efficient Killers Is Now An Essential Function Of The US Government

  • The US government is shut down, which means only essential spending is permitted. So what does the US government, or rather its Central Intelligence Agency decide to spend precious, mission-critical taxpayer money on? Why arming the Qatari-supported Al-Qaeda “rebels” in Syria of course. WaPo reports that the CIA is expanding a clandestine effort to train opposition fighters in Syria amid concern that moderate, U.S.-backed militias are rapidly losing ground in the country’s civil war, U.S. officials said…. “It’s basic infantry training,” the former U.S. intelligence official said. “How to have some discipline hitting a target, how to reload a magazine, how to clear a room. They’re not marching. They’re learning basic infantry procedures.” So let’s get this straight: 800,000 non-essential workers are furloughed, but the CIA, in its infinite wisdom, is now, when the government is shut down, doubling down on spending to make sure Al-Qaeda insurgents have even more lethal training (for that inevitable moment when they turn on their sponsor as they tend to do), and even better weapons?

Source: zerohedge.com


Government Shutdown

Shutdown Day 1: Administration Gives $445,000,000 to Corporation for Public Broadcasting; $0 to NIH Cancer Treatments - 

  • On the first day of the “shutdown” of the federal government, when members of the U.S. Senate were going to the well of their house to point out that the shutdown would prevent the National Institutes of Health from starting clinical trials for cancer patients and others facing possibly terminal illnesses, the administration was giving $445,000,000 to the Corporation for Public Broadcasting, according to the Daily Treasury Statement.
  • That means PBS NewsHour, National Public Radio and Sesame Street got a taxpayer subsidy during the shutdown, but not would-be cancer patients at the NIH.
  • The $445 million the Treasury handed over to CPB was more than the $119 million the Treasury paid on the first day of the shutdown in interest on U.S. government debt that is held by the public. It was also more than $171 million in Social Security benefits the Treasury paid that day. But it was less than the $592 million the Treasury paid for Veterans Affairs programs on the first day of the shutdown.
  • The $445 million the Treasury gave to CPB on the first day of the shutdown was also almost as much as the $471 million the administration gave to the entire Department of Health and Human Services that day.
  • CNSNews.com contacted a spokesman for CBP to ask for an explanation of why CBP got $445 million in taxpayer money on the first day of the federal government “shutdown. The spokesman suggested that CNSNews.com call the Office of Management and Budget–which is part of the White House–and responded by emailing to CNSNews.com two statements on CBP’s website. The first pointed out that CPB is a “private, not-for-profit corporation.”
  • The second said: “For 35 years, decisions on the amount of federal support for public broadcasting have been made two years ahead of the fiscal year in which the funding is allocated. In other words, Congress approves the FY2013 funding level for CPB during the FY2011 budget cycle, its FY2014 funding during the FY2012 cycle, and so on.”

 

Source: cnsnews.com

The government shutdown isn’t slowing down the warmongers.  For example:

  • The CIA is ramping up covert training program for Syrian rebels
  • President Obama has waived a ban on aiding regimes that use child soldiers
  • The Department of Defense awarded 94 new contracts worth a combined total of more than $5 billion dollars the day right before the government shutdown
  • DoD will continue to award contracts during the shutdown … but will stop publicly announcing them
  • The giant $2 billion dollar NSA spying center in Utah is still opening (the NSA is part of the Department of Defense, which carries out assassination and cyber-warfarecampaigns, as well as destroying the privacy of American citizens)

The Shutdown Political Game: Inflict Maximum Pain To Score Cheap Points

  • Here is the politicos’ government shutdown game in a nutshell: inflict maximum pain on the rest of us to score cheap points with partisans.
  • The amount of money needed to keep the National Parks open is such a tiny slice of the Federal budget that it doesn’t even register. Planned a trip of a lifetime to a National Park? Sorry, buddy–the whole game is making life as miserable as possible so we will be driven to partisan cheering for one side or the other.
  • Need a passport or a work permit? Tough luck, bucko. The sums of money needed to keep essential offices open is trivial, but that’s the game plan for both parties: make the cuts that hurt the most with the least political exposure to blowback.
  • Please recall that every politico in Washington D.C. has known when the budget and debt ceiling would reach criticality. Yet they did nothing. We all know the two-party system of governance is broken, and that both parties are equally responsible. Yet what do we do? We continue to elect the incumbents who failed to change the political culture.
  • Please remember this absurd political theater in 2014 and 2016 and vote for third party and independent candidates. I have to laugh when people object, “But voting for third parties is throwing away your vote.”

Source: zerohedge.com

 

Government website not really shutdown

http://firemapper.sc.egov.usda.gov/
https://www.eauth.usda.gov/mainPages/index.aspx
http://www.fs.usda.gov/scnfs
http://www.fs.usda.gov/wayne

 

Is This The Reason For The Annual September Fake Economic Bounce?

  • Something very curious caught our eye in today’s Non-manufacturing ISM. It wasn’t the “unexpected” drop in the data, which we reported on previously, but what one of the respondents said far in the back of the report. It was the following:
  • “The federal government’s spending is increasing greatly as agencies execute their final budgets and utilize fiscal year 2013 appropriated funds prior to their expiration on September 30th. This has  caused a major increase in procurement activity for goods and services.  Budgets are uncertain for fiscal year 2014, so some items requiring funding in future years are not being purchased.” (Public  Administration)
  • Which got us thinking: September 2013 saw a big bounce in various economic indicators leading many to speculate that this was yet another indication that the “sustainable recovery” has finally arrived. Of course, it was not just this year but also last year, and in prior years, that there has been a very distinct pick up in the late Summer economic indicators, only to promptly fade away into the fall and winter.This can be seen on the chart below.
  • This begs the question: is the only reason why the economy tends to pick up momentum dramatically as the summer ends just a function of a surge in government spending permeating the broader economy as agencies scramble to spend all the money they have before the end of the September 30 Fiscal Year End (just so they get allocated the same or greater budget in the coming fiscal year), which subsequently plunges or is outright halted as the case may be right now?
  • If so, it would explain so much, and certainly why year after year, the US economy seems to pick up in the mid-to-late Q3 period, only to dramatically fade away in the coming months, as government spending goes from a waterfall to a trickle.
  • It would also put the government’s role in generating transitory periodic spikes in economic output under a microscope, especially since it is so clearly staggered to recur every September as one after another government agency spends like a drunken sailor. And if that is the case, how long until the BLS or some other agency (upon reopening of course) is taken to task to normalize not only for hedonic indicators and climate-related seasonal factors, but also for what is now clearly an annual aberration of economic output trends?

Obama administration says impossible to prioritize U.S. payments

  • The Obama administration said on Thursday it would be impossible to prioritize debt payments over other government obligations in the event Congress fails to raise the nation’s $16.7 trillion debt ceiling and the Treasury runs out of cash.
  • A senior Treasury official told journalists that favoring bills to creditors over others would be unworkable and the administration was completely opposed to this approach, which some Republicans on Capitol Hill have embraced.
  • Separately, in a report detailing the potential economic impact of a default, the Treasury warned failing to pay the nation’s bills could punish American families and businesses with a worse recession than the 2007-2009 downturn.
  • It said a default could force up borrowing costs, weaken investment and curb growth, doing harm to the economy that could last for longer than a generation.
  • “A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket,” the Treasury Department said.
  • “The negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse,” it said.

Source: reuters.com

Central Banker “Confession” Of The Day

  • When it comes to Central Banks, there are doves and hawks – though in recent times, the two have become confused as to just what they think. However, it is becoming clear that in spite of their incessant need to print money (liquidity) into existence to maintain the status quo, some (but not all) are realizing there are very real costs to this insanity. Compare:
  • ECB – *COEURE: LIQUIDITY INTERVENTION CAN INTERFERE WITH PRICE STABILITY
  • ECB – *COEURE SAYS CRISIS SUPPORT CAN LATER HAVE “PERVERSE EFFECTS”
  • and
  • FED – *WILLIAMS SEES UNCONVENTIONAL STIMULUS FOR NEXT FEW YEARS
  • FED – *ROSENGREN SAYS FISCAL CONFLICT WARRANTED FORGOING FED QE TAPER
  • FED – *FED ZERO-RATE MOVE DIDN’T COMPROMISE POLICY
  • It seems central bankers believe what they want to believe.
  • ECB’s Coeure had some other words of warning to a Fed that appears set to extend the Un-Taper to support its feckless politicians…
  • *COEURE SAYS LIQUIDITY INTERVENTION CAN GENERATE MORAL HAZARD
  • *COEURE: LIQUID INTERVENTION CAN LEAD TO UNWARRANTED CREDIT RISK
  • *COEURE: LIQUID. INTERVENTION CAN INTERFERE WITH PRICE STABILITY
  • *COEURE SAYS CRISIS SUPPORT CAN LATER HAVE `PERVERSE EFFECTS’
  • *ECB’S COEURE SAYS `FINE LINE’ BETWEEN LIQUIDITY, SOLVENCY NEEDS
  • *COEURE: CENBANK LIQUIDITY SHOULDN’T SUBSTITUTE LACK OF CAPITAL
  • Whocouldanoda?

Source: zerohedge.com

Fed’s Lockhart says government shutdown to hurt fourth quarter U.S. growth

  •  The partial shutdown of the U.S. government after Congress failed to agree on a plan to fund operations will hurt growth in the last quarter of this year, a top Federal Reserve official said on Thursday.
  • “If it is protracted then I would expect there would be some measurable impact at least in fourth-quarter growth,” said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta.
  • Speaking to reporters at a conference at the Atlanta Fed, Lockhart said the Fed’s decision not to taper its bond buying stimulus of the economy was vindicated by the fiscal impasse.
  • The Fed opted at its policy-setting meeting last month not to reduce monthly bond purchases, partly on concerns over the fight in Congress over funding the government.
  • The government was partly shut down on October 1 after Congress failed to agree on a budget.
  • Lockhart also said the dearth of government economic data as a result of the shutdown was making it harder to gauge the economy’s health.
  • But he indicated there was still a chance the Fed could taper this year, saying he believed the timeframe that Fed Chairman Ben Bernanke suggested in June was “still in place,” but it would depend on the economy’s performance.
  • In June, Bernanke said he expected the Fed to moderate the pace of purchases later in the year.
  • The fiscal fight in Washington could have a prolonged effect, Lockhart said.
  • “I would say that events like the government shutdown or conceivably a debt ceiling debate that undermines confidence has a lasting effect in that it makes our economy look more prone to politically induced shocks.”

Source: reuters.com

Fed’s Williams says worried about impact of government shutdown

  • The president of the San Francisco Federal Reserve Bank said on Thursday he was nervous and worried about the impact to the financial markets of a prolonged shutdown of the federal government, particularly if no action is taken to raise the nation’s debt ceiling.
  • In remarks following an address made at the University of California, San Diego, John Williams said the shutdown, if relatively brief, should not have a significant impact on the economy.
  • A far greater worry, he said, would be any undermining of confidence in the U.S. economy and the U.S. dollar.
  • “I think it is important that we deal with the debt ceiling issue before we run out of money,” Williams said. He said Treasury officials have pegged that date as Oct 17.
  • He also said the Federal Reserve is on track to begin by later this year to taper off its current $85-billion-a-month bond-purchase program.
  • Williams said his stance on the issue lines up with that of Federal Reserve Chairman Ben Bernanke, who has said the Fed would begin cutting back on bond purchases this year, stopping entirely by the middle of next year.
  • Williams said economic data since June has been “mixed,” which explains why the Fed did not act in September. “Data have come out a little softer than I had expected,” he said, noting concern over the summer’s significant increase in interest rates and potential negative impact on thehousing market.
  • He said the beginning of the tapering will depend entirely on how the economy performs.
  • Williams noted that the current government shutdown does limit the amount of data available to gauge the economy, but said the Fed has access to its own statistics as well as a range of reports from industry groups and sources outside of the government.

Source: reuters.com

Treasury Warns Default Impact Could Last A Generation

  • The President warned yesterday that “this time is different,” and now the Treasury has weighed in with an even more ominous warning. In their statement, they note:
  • *TREASURY OFFICIAL: CONGRESS ACTION ONLY WAY TO AVOID DEFAULT
  • *TREASURY SEES ‘TENTATIVE’ SIGNS IMPASSE AFFECTING MARKETS
  • *TREASURY SAYS BILL YIELDS MAY REFLECT `NASCENT CONCERNS’
  • *TREASURY: DEFAULT IMPACT COULD BE PROFOUND, LAST A GENERATION
  • And so it seems not only are they looking at the same indicators as the smart money in the markets but it is clear that the rhetoric will be increased until the equity market cracks and the politicians get their catalyst to act.
  • Via The Treasury,
  • The United States has never defaulted on its obligations, and the U. S. dollar and Treasury securities are at the center of the international financial system. A default would be unprecedented and has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.
  • Full Treasury Statement can be found here.
  • What is amusing among all this blatant fearmongering, is that the Treasury can clearly choose to prioritze its payments and have more than enough cash from tax revenues alone to fund its debt obligations for a long period of time, even if that means not paying some of the government’s other ultrabloated programs.
  • From: Treasury “X Date” May Hit As Soon As October 18.
  • Priotiziation, or selective payment of obligations.
  • It would be as follows:
  • If we reach the X Date, Treasury might either prioritize payments or make full days’ worth of payments once they receive sufficient revenues to cover all of a day’s obligations.
  • - Interest on the federal debt would likely be prioritized in either scenario – it is paid on a separate computer system (FedWire).
  • Scenario # 1: Pay some bills, but not others
  • - Treasury might attempt to prioritize some types of payments over others. Prioritized payments would be made on time, others would not.
  • - This option may not be possible to implement using Treasury’s current financial systems. It would involve sorting and choosing from nearly 100 million monthly payments.
  • If the X Date arrives on October 18 (the beginning of the BPC range):
  • Treasury would be about $106 billion short of paying all bills owed between October 18 and November 15 (20 business days).
  • Approximately 32% of the funds owed for the period would go unpaid.
  • The reality would be chaotic:
  • – Unfair results, unanswered questions
  • – Treasury picking winners and losers
  • – Public uproar
  • – Intense global media focus

 

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